UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39143

ALPINE INCOME PROPERTY TRUST, INC.

(Exact name of registrant as specified in its charter)


Maryland		84-2769895
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1140 N. Williamson Blvd., Suite 140
Daytona Beach, Florida		32114
(Address of principal executive offices)		(Zip Code)

(386) 274-2202

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class:	Trading Symbol	Name of each exchange on which registered:
COMMON STOCK, $0.01 PAR VALUE	PINE	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☐	Accelerated Filer	☐

Non-accelerated Filer	☒	Smaller Reporting Company	☒

		Emerging Growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding on ~~October~~April 14, ~~2021~~2022 was ~~11,303,142.~~11,832,791.

Table of Contents

INDEX


		Page
		No.
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements		3

Consolidated Balance Sheets – ~~September 30, 2021~~March 31, 2022 (Unaudited) and December 31, ~~2020~~2021		3

Consolidated Statements of Operations – Three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		4

Consolidated Statements of Comprehensive Income – Three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		5

Consolidated Statements of Stockholders’ Equity – Three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		6

Consolidated Statements of Cash Flows – ~~Nine~~Three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		7

Notes to Consolidated Financial Statements (Unaudited)		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2927

Item 3. Quantitative and Qualitative Disclosures About Market Risk		3832

Item 4. Controls and Procedures		3832

PART II—OTHER INFORMATION		3833

Item 1. Legal Proceedings		3833

Item 1A. Risk Factors		3833

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		4133

Item 3. Defaults Upon Senior Securities		4133

Item 4. Mine Safety Disclosures		4133

Item 5. Other Information		4133

Item 6. Exhibits		4234

SIGNATURES		4335

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	As of				As of
	(Unaudited) September 30, 2021		December 31, 2020		(Unaudited) March 31, 2022		December 31, 2021
ASSETS
Real Estate:
Land, at cost	$	133,329	$	83,210
Building and Improvements, at cost		231,328		142,679
Total Real Estate, at cost		364,657		225,889
Land, at Cost					$	195,953	$	178,172
Building and Improvements, at Cost						307,985		266,236
Total Real Estate, at Cost						503,938		444,408
Less, Accumulated Depreciation		(13,249)		(6,550)		(18,965)		(15,419)
Real Estate—Net		351,408		219,339		484,973		428,989
Cash and Cash Equivalents		6,706		1,894		2,244		8,851
Restricted Cash		600		—		691		646
Intangible Lease Assets—Net		52,685		36,881		64,120		58,821
Straight-Line Rent Adjustment		2,013		2,045		2,110		1,838
Other Assets		2,909		2,081		14,588		6,369
Total Assets	$	416,321	$	262,240	$	568,726	$	505,514
LIABILITIES AND EQUITY
Liabilities:
Accounts Payable, Accrued Expenses, and Other Liabilities	$	2,393	$	1,984	$	3,981	$	2,363
Prepaid Rent and Deferred Revenue		1,334		1,055		1,524		2,033
Intangible Lease Liabilities—Net		4,998		3,299		6,242		5,476
Long-Term Debt		190,195		106,809		318,814		267,740
Total Liabilities		198,920		113,147		330,561		277,612
Commitments and Contingencies—See Note 15
Commitments and Contingencies—See Note 16
Equity:
Preferred Stock, $0.01 par value per share, 100 million shares authorized, 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020		—		—
Common Stock, $0.01 par value per share, 500 million shares authorized, 11,299,548 shares issued and outstanding as of September 30, 2021 and 7,458,755 shares issued and outstanding as of December 31, 2020		113		75
Preferred Stock, $0.01 par value per share, 100 million shares authorized, 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021						—		—
Common Stock, $0.01 par value per share, 500 million shares authorized, 11,772,963 shares issued and outstanding as of March 31, 2022 and 11,454,815 shares issued and outstanding as of December 31, 2021						118		114
Additional Paid-in Capital		198,019		132,878		207,035		200,906
Dividends in Excess of Net Income		(11,652)		(5,713)		(8,779)		(6,419)
Accumulated Other Comprehensive Income (Loss)		328		(481)
Accumulated Other Comprehensive Income						8,754		1,922
Stockholders' Equity		186,808		126,759		207,128		196,523
Noncontrolling Interest		30,593		22,334		31,037		31,379
Total Equity		217,401		149,093		238,165		227,902
Total Liabilities and Equity	$	416,321	$	262,240	$	568,726	$	505,514

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share ~~and dividend~~ data)


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Revenues:
Lease Income	$	8,171	$	5,101	$	20,658	$	13,863	$	10,799	$	5,890
Total Revenues		8,171		5,101		20,658		13,863		10,799		5,890
Operating Expenses:
Real Estate Expenses		914		555		2,389		1,705		1,092		651
General and Administrative Expenses		1,371		1,119		3,687		3,535		1,431		1,030
Depreciation and Amortization		4,308		2,694		10,914		7,003		5,672		3,143
Total Operating Expenses		6,593		4,368		16,990		12,243		8,195		4,824
Gain on Disposition of Assets		544		287		544		287
Net Income from Operations		2,122		1,020		4,212		1,907
Net Income From Operations										2,604		1,066
Interest Expense		1,066		384		2,299		977		1,680		555
Net Income		1,056		636		1,913		930		924		511
Less: Net Income Attributable to Noncontrolling Interest		(138)		(90)		(251)		(131)		(118)		(71)
Net Income Attributable to Alpine Income Property Trust, Inc.	$	918	$	546	$	1,662	$	799	$	806	$	440

Per Common Share Data:
Net Income Attributable to Alpine Income Property Trust, Inc.
Basic	$	0.08	$	0.07	$	0.18	$	0.10	$	0.07	$	0.06
Diluted	$	0.07	$	0.06	$	0.16	$	0.09	$	0.06	$	0.05

Weighted Average Number of Common Shares:
Basic		11,299,548		7,455,281		9,253,090		7,632,660		11,662,697		7,565,429
Diluted		12,996,503		8,679,135		10,637,934		8,856,514		13,366,191		8,789,283

Dividends Declared and Paid	$	0.255	$	0.20	$	0.745	$	0.60

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Net Income Attributable to Alpine Income Property Trust, Inc.	$	918	$	546	$	1,662	$	799	$	806	$	440
Other Comprehensive Income (Loss)
Other Comprehensive Income
Cash Flow Hedging Derivative - Interest Rate Swaps		148		28		809		(619)		6,832		676
Total Other Comprehensive Income (Loss)		148		28		809		(619)
Total Other Comprehensive Income										6,832		676
Total Comprehensive Income	$	1,066	$	574	$	2,471	$	180	$	7,638	$	1,116

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except per share data)

For the three months ended ~~September 30,~~March 31, 2022:


	Common Stock at Par		Additional Paid-in Capital		Dividends in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance January 1, 2022	$	114	$	200,906	$	(6,419)	$	1,922	$	196,523	$	31,379	$	227,902
Net Income		—		—		806		—		806		118		924
Stock Issuance to Directors		—		79		—		—		79		—		79
Stock Issuance, Net of Equity Issuance Costs		4		6,050		—		—		6,054		—		6,054
Cash Dividend ($0.27 per share)		—		—		(3,166)		—		(3,166)		(460)		(3,626)
Other Comprehensive Income		—		—		—		6,832		6,832		—		6,832
Balance March 31, 2022	$	118	$	207,035	$	(8,779)	$	8,754	$	207,128	$	31,037	$	238,165

For the three months ended March 31, 2021:

Common Stock at Par

Additional Paid-in Capital

Dividends in Excess of Net Income

Accumulated Other Comprehensive Income (Loss)

Stockholders' Equity

Noncontrolling Interest

Total Equity
Balance July 1, 2021

$
113

$
197,978

$
(9,689)

$
180

$
188,582

$
29,858

$
218,440
Net Income

—

—

918

—

918

138

1,056
Stock Issuance to Directors

—

79

—

—

79

—

79
Stock Issuance, Net of Equity Issuance Costs

—

(38)

—

—

(38)

—

(38)
Operating Units Issued

—

—

—

—

—

1,031

1,031
Cash Dividend ($0.255 per share)

—

—

(2,881)

—

(2,881)

(434)

(3,315)
Other Comprehensive Income

—

—

—

148

148

—

148
Balance September 30, 2021

$
113

$
198,019

$
(11,652)

$
328

$
186,808

$
30,593

$
217,401

~~For the three months ended September 30, 2020:~~

Common Stock at Par

Additional Paid-in Capital

Dividends in Excess of Net Income

Accumulated Other Comprehensive Income (Loss)

Stockholders' Equity

Noncontrolling Interest

Total Equity
Balance July 1, 2020

$
79

$
133,038

$
(3,313)

$
(647)

$
129,157

$
22,727

$
151,884
Net Income

—

—

546

—

546

90

636
Stock Issuance to Directors

—

68

—

—

68

—

68
Cash Dividend ($0.20 per share)

—

—

(1,492)

—

(1,492)

(244)

(1,736)
Other Comprehensive Income

—

—

—

28

28

—

28
Balance September 30, 2020

$
79

$
133,106

$
(4,259)

$
(619)

$
128,307

$
22,573

$
150,880

~~For the nine months ended September 30, 2021:~~

Common Stock at Par

Additional Paid-in Capital

Dividends in Excess of Net Income

Accumulated Other Comprehensive Income (Loss)

Stockholders' Equity

Noncontrolling Interest

Total Equity
Balance January 1, 2021

$
75

$
132,878

$
(5,713)

$
(481)

$
126,759

$
22,334

$
149,093
Net Income

—

—

1,662

—

1,662

251

1,913
Stock Issuance to Directors

—

218

—

—

218

—

218
Stock Issuance, Net of Equity Issuance Costs

38

64,923

—

—

64,961

—

64,961
Operating Units Issued

—

—

—

—

—

9,041

9,041
Cash Dividend ($0.745 per share)

—

—

(7,601)

—

(7,601)

(1,033)

(8,634)
Other Comprehensive Income

—

—

—

809

809

—

809
Balance September 30, 2021

$
113

$
198,019

$
(11,652)

$
328

$
186,808

$
30,593

$
217,401

~~For the nine months ended September 30, 2020:~~

Common Stock at Par

Additional Paid-in Capital

Dividends in Excess of Net Income

Accumulated Other Comprehensive Income (Loss)

Stockholders' Equity

Noncontrolling Interest

Total Equity
Balance January 1, 2020

$
79

$
137,948

$
(498)

$
—

$
137,529

$
23,176

$
160,705
Net Income

—

—

799

—

799

131

930
Stock Repurchase

—

(5,013)

—

—

(5,013)

—

(5,013)
Stock Issuance to Directors

—

171

—

—

171

—

171
Cash Dividend ($0.60 per share)

—

—

(4,560)

—

(4,560)

(734)

(5,294)
Other Comprehensive Loss

—

—

—

(619)

(619)

—

(619)
Balance September 30, 2020

$
79

$
133,106

$
(4,259)

$
(619)

$
128,307

$
22,573

$
150,880


	Common Stock at Par		Additional Paid-in Capital		Dividends in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance January 1, 2021	$	75	$	132,878	$	(5,713)	$	(481)	$	126,759	$	22,334	$	149,093
Net Income		—		—		440		—		440		71		511
Stock Issuance to Directors		—		66		—		—		66		—		66
Stock Issuance, Net of Equity Issuance Costs		4		7,647		—		—		7,651		—		7,651
Cash Dividend ($0.24 per share)		—		—		(1,896)		—		(1,896)		(293)		(2,189)
Other Comprehensive Income		—		—		—		676		676		—		676
Balance March 31, 2021	$	79	$	140,591	$	(7,169)	$	195	$	133,696	$	22,112	$	155,808

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Cash Flow from Operating Activities:
Cash Flow From Operating Activities:
Net Income	$	1,913	$	930	$	924	$	511
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization		10,914		7,003		5,672		3,143
Amortization of Intangible Lease Assets and Liabilities to Lease Income		(168)		(78)		(101)		(41)
Amortization of Deferred Financing Costs to Interest Expense		236		133		125		65
Gain on Disposition of Assets		(544)		(287)
Non-Cash Compensation		231		201		79		73
Decrease (Increase) in Assets:
Straight-Line Rent Adjustment		(393)		(1,237)		(294)		(147)
COVID-19 Rent Repayments		408		(538)		23		271
Other Assets		(654)		(589)		243		27
Increase (Decrease) in Liabilities:
Accounts Payable, Accrued Expenses, and Other Liabilities		869		774		(40)		(350)
Prepaid Rent and Deferred Revenue		278		1,044		(509)		257
Net Cash Provided By Operating Activities		13,090		7,356		6,122		3,809
Cash Flow from Investing Activities:
Cash Flow From Investing Activities:
Acquisition of Real Estate, Including Capitalized Expenditures		(120,961)		(100,736)		(66,089)		(22,117)
Proceeds from Disposition of Assets		3,653		4,933
Net Cash Used In Investing Activities		(117,308)		(95,803)		(66,089)		(22,117)
Cash Flow from Financing Activities:
Proceeds from Long-Term Debt		217,121		95,000		62,000		12,500
Payments on Long-Term Debt		(162,431)		(6,692)		(11,000)		—
Cash Paid for Loan Fees		(1,387)		(10)		(23)		—
Repurchase of Common Stock		—		(5,013)
Proceeds From Stock Issuance, net		64,961		—
Proceeds From Stock Issuance, Net						6,054		7,651
Dividends Paid		(8,634)		(5,294)		(3,626)		(2,189)
Net Cash Provided By Financing Activities		109,630		77,991		53,405		17,962
Net Increase (Decrease) in Cash and Cash Equivalents		5,412		(10,456)
Cash and Cash Equivalents, Beginning of Period		1,894		12,342
Cash and Cash Equivalents, End of Period	$	7,306	$	1,886
Net Decrease in Cash, Cash Equivalents and Restricted Cash						(6,562)		(346)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period						9,497		1,894
Cash, Cash Equivalents and Restricted Cash, End of Period					$	2,935	$	1,548

Reconciliation of Cash to the Consolidated Balance Sheets:
Cash and Cash Equivalents	$	6,706	$	1,886	$	2,244	$	1,548
Restricted Cash		600		—		691		—
Total Cash	$	7,306	$	1,886	$	2,935	$	1,548

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ALPINE INCOME PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited, in thousands)


	Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest	$	2,030	$	809	$	1,512	$	482

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Unrealized Gain (Loss) on Cash Flow Hedge	$	809	$	(619)
Operating Units Issued in Exchange for Real Estate	$	9,041	$	—
Assumption of Mortgage Note Payable	$	30,000	$	—
Unrealized Gain on Cash Flow Hedge					$	6,832	$	676
Right-of-Use Assets and Operating Lease Liability					$	1,831	$	—

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BUSINESS AND ORGANIZATION

BUSINESS

Alpine Income Property Trust, Inc. (the “Company” or “PINE”) is a real estate company that owns and operates a high-quality portfolio of commercial net lease properties. The terms “us,” “we,” “our,” and “the Company” as used in this report refer to Alpine Income Property Trust, Inc. together with our consolidated subsidiaries.

Our portfolio consists of 89129 net leased ~~retail and office~~ properties located in 6284 markets in 2835 states. The properties in our portfolio are primarily subject to long-term, triple-net leases, which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures.

The Company has 0 employees and is externally managed by Alpine Income Property Manager, LLC, a Delaware limited liability company and a wholly owned subsidiary of CTO Realty Growth, Inc. (our “Manager”). CTO Realty Growth, Inc. (NYSE: CTO) is a Maryland corporation that is a publicly traded diversified ~~REIT~~real estate investment trust (“REIT”) and the sole member of our Manager (“CTO”).

ORGANIZATION

The Company is a Maryland corporation that was formed on August 19, 2019. On November 26, 2019, the Company closed its initial public offering (“IPO”) of shares of its common stock (the “Offering”) as well as a concurrent private placement of shares of common stock to CTO. Net proceeds from the Offering and the concurrent CTO Private Placement (defined below) were used to purchase 15 properties from CTO. Additionally, CTO contributed to Alpine Income Property OP, LP, the Company’s operating partnership (the “Operating Partnership”), 5 additional properties in exchange for operating partnership units (“OP Units”).

The price per share paid in the Offering and the concurrent private placement was $19.00 (the “IPO Price”). The Offering raised $142.5 million in gross proceeds from the issuance of 7,500,000 shares of our common stock. We also raised $7.5 million from the concurrent private placement to CTO from the issuance of 394,737 shares of our common stock (“CTO Private Placement”). Included in the Offering was CTO’s purchase of 421,053 shares of our common stock for $8.0 million, representing a cash investment by CTO of $15.5 million. A total of $125.9 million of proceeds from the Offering were utilized to acquire 15 properties in our initial ~~portfolio.~~portfolio from CTO. The remaining 5 properties in our initial portfolio were contributed by CTO in exchange for 1,223,854 ~~OP Units~~units of the operating partnership (the “OP Units”) for a value of $23.3 million based on the IPO Price. As of March 31, 2022, four of the properties included within our initial portfolio have been sold. Subsequent to March 31, 2022, one additional property included within our initial portfolio was sold (see Note 17, “Subsequent Events”). The Company incurred a total of $12.0 million of transaction costs, which included underwriting fees of $9.4 million. Upon completion of the Offering, the CTO Private Placement, and the other transactions executed at the time of our listing on the New York Stock Exchange (the “NYSE”) under the symbol “PINE” (collectively defined as the “Formation Transactions”), CTO owned 22.3% of our outstanding common stock (assuming the OP Units issued to CTO in the Formation Transactions are exchanged for shares of our common stock on a 1-for-one basis).

We conduct the substantial majority of our operations through ~~and substantially all of our assets are held by, the Operating Partnership.~~Alpine Income Property OP, LP (the “Operating Partnership”). Our wholly owned subsidiary, Alpine Income Property GP, LLC (“PINE GP”), is the sole general partner of the Operating Partnership. Substantially all of our assets are held by, and our operations are conducted through, the Operating Partnership. As of ~~September 30, 2021,~~March 31, 2022, we have a total ownership interest in the Operating Partnership of ~~86.9%~~87.4%, with CTO holding, directly and indirectly, a ~~9.4%~~9.1% ownership interest in the Operating Partnership. The remaining ~~3.7%~~3.5% ownership interest is held by an unrelated third party in connection with the issuance of 479,640 OP Units valued at $9.0 million in the aggregate, or $18.85 per ~~unit, based on the Company’s trailing 10 day average closing share price.~~unit. The issuance of 479,640 OP Units includes (i) 424,951 OP Units issued as ~~partial~~ consideration for the portfolio of 9 net lease properties acquired on June 30, 2021 and (ii) 54,689 OP Units issued ~~in connection with~~as consideration for the acquisition of 1 net lease property on July 12, 2021 (see Note 3, ~~“Income Property~~“Property Portfolio”). Our interest in the Operating Partnership generally entitles us to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to our percentage ownership. We, through PINE GP, generally have the exclusive power under

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the partnership agreement to manage and conduct the business and affairs of the Operating Partnership, subject to certain approval and voting rights of the limited partners. Our Board of Directors (the “Board”) manages our business and affairs.

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The Company has elected to be taxed as a ~~real estate investment trust (“REIT”)~~REIT for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the ~~“Internal Revenue Code”~~“Code”). To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income, without regard to the dividends paid deduction or net capital gain, to its stockholders (which ~~is computed and which~~ does not necessarily equal net income as calculated in accordance with generally accepted accounting principles). As a REIT, the Company is generally not subject to U.S. federal corporate income tax to the extent of its distributions to stockholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal income tax on its taxable income at regular corporate rates and generally will not be permitted to qualify for treatment as a REIT for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. Even if the Company qualifies for taxation as a REIT, the Company may be subject to state and local taxes on its income and property and federal income and excise taxes on its undistributed income.

~~COVID-19 PANDEMIC~~

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has spread throughout the United States. The spread of the COVID-19 Pandemic and its variants have continued to cause significant volatility in the U.S. and international markets, and in many industries, business activity has experienced periods of almost complete shutdown. There continues to be uncertainty around the duration and severity of business disruptions related to the COVID-19 Pandemic and its variants, as well as their impact on the U.S. economy and international economies.

Contractual Base Rent (“CBR”) represents the amount owed to the Company under the current terms of its lease agreements. As a result of the COVID-19 Pandemic, during the year ended December 31, 2020, the Company agreed to defer or abate certain CBR in exchange for additional lease term or other lease enhancing additions. Repayments of the remaining balance of deferred CBR began in the third quarter of 2020, with payments continuing, in some cases, through mid-year 2022.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period presented. Actual results could differ from those estimates.

Among other factors, fluctuating market conditions that can exist in the national real estate markets and the volatility and uncertainty in the financial and credit markets make it possible that the estimates and assumptions, most notably those related to PINE’s investment in ~~income~~ properties, could change materially due to continued volatility in the real estate and financial markets, or as a result of a significant dislocation in those markets.

LONG-LIVED ASSETS

The Company follows Financial Accounting Standards Board (“FASB”) ~~ASC~~Accounting Standards Codification (“ASC”) Topic 360-10, Property, Plant, and Equipment, in conducting its impairment analyses. The Company reviews the recoverability of long-lived assets, primarily real estate, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of situations considered to be triggering events include: a substantial decline in operating cash flows during the period, a current or projected loss from operations, ~~an income~~a property not fully leased or leased at

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rates that are less than current market rates, and any other quantitative or qualitative events deemed significant by management. Long-lived assets are evaluated for impairment by using an undiscounted cash flow approach, which considers future estimated capital expenditures. Impairment of long-lived assets is measured at fair value less cost to sell.

PURCHASE ACCOUNTING FOR ACQUISITIONS OF REAL ESTATE SUBJECT TO A LEASE

Investments in real estate are carried at cost less accumulated depreciation and impairment losses, if any. The cost of investments in real estate reflects their purchase price or development cost. We evaluate each acquisition transaction to determine whether the acquired asset meets the definition of a business. Under Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, an acquisition does not qualify as a business when there is no substantive process acquired or substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred.

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In accordance with FASB guidance, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the management believes that it is likely that the tenant will renew the lease upon expiration, in which case the Company amortizes the value attributable to the renewal over the renewal period. The value of in-place leases and leasing costs are amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off.

~~INCOME~~ SALES OF REAL ESTATE

When properties are disposed of, the related cost basis of the real estate, intangible lease assets, and intangible lease liabilities, net of accumulated depreciation and/or amortization, and any accrued straight-line rental income balance for the underlying operating leases are removed, and gains or losses from the dispositions are reflected in net income within gains on dispositions of assets. In accordance with the FASB guidance, gains or losses on sales of real estate are generally recognized using the full accrual method.

PROPERTY LEASE REVENUE

The rental arrangements associated with the Company’s ~~income~~ property portfolio are classified as operating leases. The Company recognizes lease income on these properties on a straight-line basis over the term of the lease. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease income recognized under this method and contractual lease payment terms (i.e., straight-line rent) is recorded as a deferred operating lease receivable and is included in straight-line rent adjustment on the accompanying consolidated balance sheets. The Company’s leases provide for reimbursement from tenants for variable lease payments including common area maintenance, insurance, real estate taxes, and other operating expenses. A portion of our variable lease payment revenue is estimated each period and is recognized as rental income in the period the recoverable costs are incurred and accrued.

The collectability of tenant receivables and straight-line rent adjustments is determined based on, among other things, the aging of the tenant receivable, management’s evaluation of credit risk associated with the tenant and industry of the tenant, and a review of specifically identified accounts using judgment. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the ~~Company had recorded an~~Company’s allowance for doubtful accounts ~~of $0.1~~totaled $0.3 million.

OPERATING LAND LEASE EXPENSE

The Company is the lessee under operating land leases for certain of its properties, which leases are classified as operating leases pursuant to FASB ASC Topic 842, Leases. The corresponding lease expense is recognized on a straight-line basis over the term of the lease and is included in real estate expenses in the accompanying consolidated statements of operations.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, bank demand accounts, and money market accounts having original maturities of 90 days or less. The Company’s bank balances as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 include certain amounts over the Federal Deposit Insurance Corporation limits. The carrying value of cash and cash equivalents is

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reported at Level 1 in the fair value hierarchy, which represents valuation based upon quoted prices in active markets for identical assets or liabilities.

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RESTRICTED CASH

Restricted cash totaled ~~$0.6~~$0.7 million at ~~September 30, 2021~~March 31, 2022 which is being held in a capital replacement and leasing commissions reserve account in connection with our financing of 6 ~~income~~ properties.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITY

~~Interest Rate Swaps.~~ The Company accounts for its cash flow hedging derivatives in accordance with FASB ASC Topic 815-20, Derivatives and Hedging. Depending upon the hedge’s value at each balance sheet date, the derivatives are included in either other assets or accounts payable, accrued expenses, and other liabilities on the accompanying consolidated balance sheet at its fair value. On the date each interest rate swap was entered into, the Company designated the derivatives as a hedge of the variability of cash flows to be paid related to the recognized long-term debt liabilities.

The Company documented the relationship between the hedging instruments and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transactions. At the hedges’ inception, the Company ~~formally~~ assessed whether the derivatives that are used in hedging the transactions are highly effective in offsetting changes in cash flows of the hedged items, and we will continue to do so on ~~an ongoing~~a quarterly basis. As the terms of the interest rate swaps and the associated debts are identical, both hedging instruments qualify for the shortcut method, therefore, it is assumed that there is no hedge ineffectiveness throughout the entire term of the hedging instruments.

Changes in fair value of the hedging instruments that are highly effective and designated and qualified as cash-flow hedges are recorded in other comprehensive income and loss, until earnings are affected by the variability in cash flows of the designated hedged items (see Note 9,10, “Interest Rate Swaps”).

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company’s financial assets and liabilities including cash and cash equivalents, restricted cash, accounts receivable included in other assets, accounts payable, and accrued expenses and other liabilities ~~at September 30, 2021 and December 31, 2020,~~ approximate fair value because of the short maturity of these instruments. The carrying value of the ~~Company’s~~ Credit Facility, hereinafter defined, ~~as of September 30, 2021 and December 31, 2020,~~ approximates current market rates for revolving credit arrangements with similar risks and maturities. The Company estimates the fair value of its mortgage note payable and term loans based on incremental borrowing rates for similar types of borrowing arrangements with the same remaining maturity and on the discounted estimated future cash payments to be made for other debt. The discount rate used to calculate the fair value of debt approximates current lending rates for loans and assumes the debt is outstanding through maturity. Since such amounts are estimates that are based on limited available market information for similar transactions, which is a Level 2 non-recurring measurement, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.

FAIR VALUE MEASUREMENTS

The Company’s estimates of fair value of financial and non-financial assets and liabilities is based on the framework established by GAAP. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. GAAP describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

●

Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

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●

Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

●

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

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CONCENTRATION OF CREDIT RISK

~~Certain of the~~There were no tenants ~~in the portfolio of 89 properties~~who accounted for more than 10% of total revenues during the ~~nine~~three months ended ~~September 30, 2021 and 2020.~~

~~During~~March 31, 2022. Certain of the ~~nine~~tenants in the portfolio accounted for more than 10% of total revenues during the three months ended ~~September 30,~~March 31, 2021, ~~the property leased to~~which tenants included Wells Fargo Bank ~~NA represented 13% of total revenues. During the nine months ended September 30, 2020, the properties leased to Wells Fargo Bank, NA~~ and Hilton Grand Vacations, ~~represented 20%~~representing 14% and ~~13%~~11% of total revenues, respectively.

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, based on square footage, 11%~~2021, 19% and ~~17%~~20%, respectively, of the Company’s real estate portfolio was located in the State of Florida and 11% and 15%, respectively, of the Company’s real estate portfolio was located in the State of North Carolina. Additionally, as of September 30, 2021, more than 10% of the Company’s real estate portfolio, based on square footage, was located in the ~~State~~state of ~~Texas and more than 10% of the Company’s real estate portfolio was located in the States of Oregon and Michigan as of December 31, 2020.~~

~~RECLASSIFICATIONS~~

Certain items in the consolidated balance sheet as of December 31, 2020 have been reclassified to conform to the presentation as of September 30, 2021. Specifically, in the first quarter of 2021, the Company reclassified deferred financing costs, net of accumulated amortization, as a component of other assets on the accompanying consolidated balance sheet. Accordingly, deferred financing costs of $0.9 million, net of accumulated amortization of $0.2 million, were reclassified from long-term debt to other assets as of December 31, 2020. Additionally, in the third quarter of 2021, the Company increased non-cash compensation for the nine months ended September 30, 2020 by $0.03 million through a reclassification from accounts payable, accrued expenses, and other liabilities within operating activities on the accompanying consolidated statements of cash flows which is the result of timing related to the issuance of shares for director retainers.Texas.

NOTE 3. ~~INCOME~~ PROPERTY PORTFOLIO

As of ~~September 30, 2021,~~March 31, 2022, the Company’s ~~income~~ property portfolio consisted of 89129 properties with total square footage of ~~2.7~~3.5 million.

Leasing revenue consists of long-term rental revenue from retail and office ~~income~~ properties, which is recognized as earned, using the straight-line method over the life of each lease. Lease payments below include straight-line base rental revenue as well as the non-cash accretion of above and below market lease amortization. The variable lease payments are comprised of percentage rent payments and reimbursements from tenants for common area maintenance, insurance, real estate taxes, and other operating expenses.

The components of leasing revenue are as follows (in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Lease Income
Lease Payments	$	7,418	$	4,721	$	18,850	$	12,762	$	9,731	$	5,446
Variable Lease Payments		753		380		1,808		1,101		1,068		444
Total Lease Income	$	8,171	$	5,101	$	20,658	$	13,863	$	10,799	$	5,890

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Minimum Future Rental Receipts. Minimum future rental receipts under non-cancelable operating leases, excluding percentage rent and other lease payments that are not fixed and determinable, having remaining terms in excess of one year subsequent to ~~September 30, 2021,~~March 31, 2022, are summarized as follows (in thousands):


Year Ending December 31,	Amounts		Amounts
Remainder of 2021	$	8,167
2022		32,264
Remainder of 2022			$	30,798
2023		32,181		40,560
2024		31,465		39,514
2025		30,467		38,013
2026 and thereafter (cumulative)		118,512
2026				34,211
2027				31,258
2028 and Thereafter (Cumulative)				109,721
Total	$	253,056	$	324,075

~~2021~~2022 Activity. During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company acquired ~~42 income~~16 properties for a combined purchase price of ~~$158.7~~$65.5 million, or ~~an acquisition~~a total cost of ~~$160.0~~$66.0 million including capitalized acquisition costs. The properties are located in 12 states, leased to 7 different tenants, and had a weighted average remaining lease term of 9.0 years at the time of acquisition. Of the total acquisition cost, ~~$52.1~~$17.7 million was allocated to land, ~~$89.6~~$41.7 million was allocated to buildings and improvements, ~~$20.5~~$7.5 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and ~~$2.2~~$0.9 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was ~~8.4~~9.2 years at acquisition. NaN properties were disposed of during the three months ended March 31, 2022.

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~~The leases attributable to~~2021 Activity. During the ~~income properties acquired during the nine~~three months ended ~~September 30, 2021 are described below:~~

Description

Location

Date of Acquisition

Square-Feet

Purchase Price ($000's)

Remaining Lease Term at Acquisition Date (in years)
Dollar General

Cut and Shoot, TX

1/25/2021

9,096

$
1,727

14.8
Dollar General

Del Rio, TX

1/25/2021

9,219

1,403

14.0
Dollar General

Seguin, TX

1/25/2021

9,155

1,290

14.1
At Home

Canton, OH

3/09/2021

89,902

8,571

8.4
Pet Supplies Plus

Canton, OH

3/09/2021

8,400

1,135

6.6
Salon Lofts

Canton, OH

3/09/2021

4,000

694

7.0
Sportsman Warehouse

Albuquerque, NM

3/29/2021

48,974

7,100

8.4
Burlington Stores, Inc.

North Richland Hills, TX

4/23/2021

70,891

11,528

7.8
Academy Sports

Florence, SC

6/22/2021

58,410

7,650

7.7
Big Lots

Durant, OK

6/25/2021

36,794

1,836

5.5
Orscheln

Durant, OK

6/25/2021

37,965

2,017

1.7
Lowe's

Katy, TX

6/30/2021

131,644

14,672

11.1
Harris Teeter

Charlotte, NC

6/30/2021

45,089

8,273

6.8
Rite Aid

Renton, WA

6/30/2021

16,280

7,200

5.1
Walgreens

Clermont, FL

6/30/2021

13,650

5,085

7.2
Big Lots

Germantown, MD

6/30/2021

25,589

4,670

9.6
Big Lots

Phoenix, AZ

6/30/2021

34,512

4,599

9.6
Circle K

Indianapolis, IN

6/30/2021

4,283

2,800
⁽¹⁾
3.4
Burger King

Plymouth, NC

6/30/2021

3,142

1,736
⁽¹⁾
6.8
Dollar Tree

Demopolis, AL

6/30/2021

10,159

1,615
⁽¹⁾
8.7
Firestone

Pittsburgh, PA

6/30/2021

10,629

1,468
⁽¹⁾
7.8
Advance Auto Parts

Ware, MA

6/30/2021

6,889

1,396
⁽¹⁾
3.6
Grease Monkey

Stockbridge, GA

6/30/2021

1,846

1,318
⁽¹⁾
12.3
Hardee's

Boaz, AL

6/30/2021

3,542

1,185
⁽¹⁾
9.4
Schlotzsky's

Sweetwater, TX

6/30/2021

2,431

1,147
⁽¹⁾
14.0
Advance Auto Parts

Athens, GA

6/30/2021

6,871

1,127
⁽¹⁾
3.6
Family Dollar

Burlington, NC

7/01/2021

11,394

1,618

9.8
O'Reilly Auto Parts

Duluth, MN

7/12/2021

11,182

1,030
⁽¹⁾
6.4
Tractor Supply

Washington Court House, OH

8/27/2021

39,984

2,370

10.8
Harbor Freight

Midland, MI

8/31/2021

14,624

1,750

4.8
Camping World

Duluth, MN

9/14/2021

66,033

10,451

12.3
Advance Auto Parts

Ludington, MI

9/14/2021

6,604

1,050

10.3
Advance Auto Parts

New Baltimore, MI

9/14/2021

6,784

1,050

10.3
Dollar Tree

Stillwell, OK

9/17/2021

9,828

1,576

10.5
O'Reilly Auto Parts

Angels Camp, CA

9/22/2021

7,066

2,125

4.5
Walmart

Hempstead, TX

9/28/2021

52,190

4,450

5.3
7-Eleven

Olathe, KS

9/30/2021

4,146

3,782

5.7
At Home

Turnersville, NJ

9/30/2021

89,460

7,181

8.1
Boston Market

Turnersville, NJ

9/30/2021

2,627

1,027

8.3
Verizon

Turnersville, NJ

9/30/2021

6,027

3,568

5.8
Advance Auto Parts

St. Paul, MN

9/30/2021

7,201

2,305

7.1
Hobby Lobby

Aberdeen, SD

9/30/2021

49,034

3,150

3.4
Dollar Tree

Albuquerque, NM

9/30/2021

10,023

1,081

9.4
Office Depot

Albuquerque, NM

9/30/2021

30,346

3,814

2.3
Valero ⁽²⁾

Jackson, MS

9/30/2021

1,920

1,067

20.0
Valero ⁽²⁾

Leland, MS

9/30/2021

3,375

977

20.0

Total / Weighted Average

1,129,210

$
158,664

8.1

~~(1)~~

~~The aggregate purchase price of $14.8 million was partially funded through the issuance of 479,640 OP Units valued at $9.0 million, see Note 10, “Equity.”~~

~~(2)~~

~~Subject to a master lease agreement.~~

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~~On July 21,~~March 31, 2021, the Company disposed of 1 income property, classified as held for sale as of June 30, 2021, leased to Outback Steakhouse located in Huntersville, North Carolina, for a sales price of $3.8 million, generating a gain on sale of $0.5 million.

~~2020 Activity.~~ ~~During the nine months ended September 30, 2020, the Company~~ acquired ~~26 income~~5 properties for a combined purchase price of ~~$99.3~~$21.9 million, or ~~an acquisition~~a total cost of ~~$100.3~~$22.1 million including capitalized acquisition costs. The properties are located in 3 states, leased to 5 different tenants, and had a weighted average remaining lease term of 9.2 years at the time of acquisition. Of the total acquisition cost, ~~$25.8~~$5.4 million was allocated to land, ~~$59.7~~$13.4 million was allocated to buildings and improvements, ~~$16.1~~$3.4 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and ~~$1.3~~$0.1 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was ~~10.2~~9.2 years at acquisition. NaN properties were disposed of during the three months ended March 31, 2021.

~~The net lease income properties acquired during the nine months ended September 30, 2020 are described below:~~

Description

Location

Date of Acquisition

Square-Feet

Purchase Price ($000's)

Remaining Lease Term at Acquisition Date (in years)
Conn's HomePlus

Hurst, TX

1/10/2020

37,957

$
6,100

11.6
7-Eleven

Austin, TX

1/13/2020

6,400

5,762

15.0
7-Eleven

Georgetown, TX

1/13/2020

7,726

4,301

15.0
Lehigh Gas Wholesale Services, Inc.

Highland Heights, KY

2/03/2020

2,578

4,250

10.8
American Multi-Cinema, Inc.

Tyngsborough, MA

2/19/2020

39,474

7,055

10.1
Hobby Lobby

Tulsa, OK

2/28/2020

84,180

12,486

10.8
Long John Silver's

Tulsa, OK

2/28/2020

3,000

264

N/A
Old Time Pottery

Orange Park, FL

2/28/2020

84,180

6,312

10.4
Freddy's Frozen Custard

Orange Park, FL

2/28/2020

3,200

303

6.8
Hobby Lobby

Arden, NC

6/24/2020

55,000

7,987

11.2
Walmart

Howell, MI

6/30/2020

214,172

20,590

6.6
Advanced Auto Parts

Severn, MD

9/14/2020

6,876

2,588

14.5
Dollar General

Heuvelton, NY

9/14/2020

9,342

1,462

12.1
Dollar General

Winthrop, NY

9/14/2020

9,167

1,589

11.0
Dollar General

Salem, NY

9/14/2020

9,199

1,485

13.0
Dollar General

Harrisville, NY

9/14/2020

9,309

1,466

13.3
Dollar General

Newtonsville, OH

9/14/2020

9,290

1,164

9.7
Dollar General

Hammond, NY

9/14/2020

9,219

1,384

12.3
Dollar General

Barker, NY

9/14/2020

9,275

1,439

13.2
Dollar General

Chazy, NY

9/14/2020

9,277

1,673

11.0
Dollar General

Milford, ME

9/21/2020

9,128

1,606

13.1
Dollar General

Limestone, ME

9/21/2020

9,167

1,456

13.1
Dollar General

Bingham, ME

9/21/2020

9,345

1,522

13.1
Dollar General

Willis, TX

9/23/2020

9,138

1,774

14.9
Dollar General

Somerville, TX

9/23/2020

9,252

1,472

14.8
Dollar General

Odessa, TX

9/30/2020

9,127

1,792

14.8

Total / Weighted Average

673,978

$
99,282

10.8

On September 25, 2020, the Company disposed of 1 income property, classified as held for sale as of June 30, 2020, leased to Outback Steakhouse located in Charlottesville, Virginia, for a sales price of $5.1 million, generating a gain on sale of $0.3 million.

~~Table of Contents~~

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the consolidated balance sheets at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):


	September 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and Cash Equivalents - Level 1	$	6,706	$	6,706	$	1,894	$	1,894	$	2,244	$	2,244	$	8,851	$	8,851
Restricted Cash - Level 1	$	600	$	600	$	—	$	—	$	691	$	691	$	646	$	646
Long-Term Debt - Level 2	$	190,195	$	195,283	$	106,809	$	106,809	$	318,814	$	319,346	$	267,740	$	272,637

The estimated fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

The following tables present the fair value of assets ~~(liabilities)~~ measured on a recurring basis by ~~Level~~level as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):. See Note 10, “Interest Rate Swaps” for further disclosure related to the Company’s interest rate swaps.


			Fair Value at Reporting Date Using								Fair Value at Reporting Date Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2021
March 31, 2022
2026 Term Loan Interest Rate Swap ⁽¹⁾	$	197	$	—	$	197	$	—	$	3,782	$	—	$	3,782	$	—
2027 Term Loan Interest Rate Swap ⁽²⁾	$	131	$	—	$	131	$	—	$	4,972	$	—	$	4,972	$	—
December 31, 2020
Credit Facility Interest Rate Swap ⁽³⁾	$	(481)	$	—	$	(481)	$	—
December 31, 2021
2026 Term Loan Interest Rate Swap ⁽¹⁾	$	—	$	—	$	—	$	—	$	945	$	—	$	945	$	—
2027 Term Loan Interest Rate Swap ⁽²⁾	$	—	$	—	$	—	$	—	$	977	$	—	$	977	$	—

(1)	Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of 0.81% plus the applicable spread on the $60.0 million 2026 Term Loan (hereinafter defined) balance.

(2)

Effective September 30, 2021, the Company utilized interest rate swaps, inclusive of its redesignation of the existing $50.0 million interest rate swap entered into as of April 30, 2020, to fix LIBOR and achieve a weighted average fixed interest rate of 0.53% plus the applicable spread on the $80.0 million 2027 Term Loan (hereinafter defined) balance. On September 30, 2021, the Company entered into an additional interest rate swap to extend the fixed interest rate through maturity on January 31, 2027.

~~(3)~~

Effective April 30, 2020, the Company utilized an interest rate swap to fix LIBOR and achieve a fixed interest rate of 0.48% plus the applicable spread on $50.0 million of the outstanding balance on the Credit Facility (hereinafter defined).

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NOTE 5. INTANGIBLE ASSETS AND LIABILITIES

Intangible assets and liabilities consist of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their fair values. Intangible assets and liabilities consisted of the following as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):


	As of				As of
	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Intangible Lease Assets:
Value of In-Place Leases	$	41,090	$	27,494	$	50,140	$	45,301
Value of Above Market In-Place Leases		3,182		2,187		4,022		3,623
Value of Intangible Leasing Costs		16,966		11,459		21,368		19,066
Sub-total Intangible Lease Assets		61,238		41,140		75,530		67,990
Accumulated Amortization		(8,553)		(4,259)		(11,410)		(9,169)
Sub-total Intangible Lease Assets—Net		52,685		36,881		64,120		58,821
Intangible Lease Liabilities:
Value of Below Market In-Place Leases		(5,736)		(3,674)		(7,379)		(6,397)
Sub-total Intangible Lease Liabilities		(5,736)		(3,674)		(7,379)		(6,397)
Accumulated Amortization		738		375		1,137		921
Sub-total Intangible Lease Liabilities—Net		(4,998)		(3,299)		(6,242)		(5,476)
Total Intangible Assets and Liabilities—Net	$	47,687	$	33,582	$	57,878	$	53,345

The following table reflects the net amortization of intangible assets and liabilities during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Amortization Expense	$	1,637	$	1,038	$	4,134	$	2,646	$	2,126	$	1,194
Increase to Income Properties Revenue		(77)		(30)		(168)		(78)
Accretion to Properties Revenue										(101)		(41)
Net Amortization of Intangible Assets and Liabilities	$	1,560	$	1,008	$	3,966	$	2,568	$	2,025	$	1,153

The estimated future amortization expense (income) related to net intangible assets and liabilities is as follows (in thousands):


Year Ending December 31,	Future Amortization Expense		Future Accretion to Income Property Revenue		Net Future Amortization of Intangible Assets and Liabilities		Future Amortization Expense		Future Accretion to Property Revenue		Net Future Amortization of Intangible Assets and Liabilities
Remainder of 2021	$	1,819	$	(74)	$	1,745
2022		7,276		(297)		6,979
Remainder of 2022							$	6,870	$	(341)	$	6,529
2023		7,274		(297)		6,977		8,924		(456)		8,468
2024		7,044		(285)		6,759		8,558		(436)		8,122
2025		6,496		(239)		6,257		7,886		(398)		7,488
2026 and thereafter		20,063		(1,093)		18,970
2026								6,762		(248)		6,514
2027								5,572		(233)		5,339
2028 and Thereafter								15,914		(496)		15,418
Total	$	49,972	$	(2,285)	$	47,687	$	60,486	$	(2,608)	$	57,878

As of ~~September 30, 2021,~~March 31, 2022, the weighted average amortization period of both the total intangible assets and liabilities was ~~8.9~~9.0 years.

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NOTE 6. OTHER ASSETS

Other assets consisted of the following (in thousands):


	As of				As of
	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Tenant Receivables	$	338	$	164
Accrued Unbilled Tenant Receivables—Net of Allowance for Doubtful Accounts⁽¹⁾		772		119
Tenant Receivables—Net of Allowance for Doubtful Accounts⁽¹⁾					$	212	$	790
Accrued Unbilled Tenant Receivables						610		553
Prepaid Insurance		72		606		434		616
Deposits on Acquisitions		680		100		590		350
Prepaid and Deposits—Other		205		442
Prepaid Expenses, Deposits, and Other						1,755		1,496
Deferred Financing Costs—Net		461		650		406		469
Interest Rate Swaps		381		—		8,754		2,095
Operating Leases - Right-of-Use Asset ⁽²⁾						1,827		—
Total Other Assets	$	2,909	$	2,081	$	14,588	$	6,369

(1)	~~As of September 30, 2021 and December 31, 2020, includes $0.1~~Includes $0.3 million allowance for doubtful ~~accounts.~~accounts as of March 31, 2022 and December 31, 2021.

(2)	See Note 7, “Operating Land Leases” for further disclosure related to the Company’s right-of-use asset balance as of March 31, 2022.

NOTE 7. OPERATING LAND LEASES

The Company is the lessee under operating land leases for certain of its properties. FASB ASC Topic 842, Leases, requires a lessee to recognize right-of-use assets and lease liabilities that arise from leases, whether qualifying as an operating or finance lease. As of March 31, 2022, the Company’s right-of-use assets and corresponding lease liabilities totaled $1.8 million, which balances are reflected within other assets and accounts payable, accrued expenses, and other liabilities, respectively, on the consolidated balance sheets. The right-of-use assets and lease liabilities are measured based on the present value of the lease payments utilizing discount rates estimated to be equal to that which the Company would pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment.

The Company’s operating land leases do not include variable lease payments and generally provide renewal options, at the Company’s election, to extend the terms of the respective leases. Renewal option periods are included in the calculation of the right-of-use assets and corresponding lease liabilities when it is reasonably certain that the Company, as lessee, will exercise the option to extend the lease.

Amortization of right-of-use assets for operating land leases is recognized on a straight-line basis over the term of the lease and is included within real estate expenses in the consolidated statements of operations. Amortization totaled less than $0.01 million during the three months ended March 31, 2022, with 0 such expense recognized during the three months ended March 31, 2021.

The following table reflects a summary of operating land leases, under which the Company is the lessee, for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended
	March 31, 2022			March 31, 2021
Operating Cash Outflows	$	0.01		$	—
Weighted Average Remaining Lease Term		8.5			—
Weighted Average Discount Rate		2.0	%		—

Table of Contents

Minimum future lease payments under non-cancelable operating land leases, having remaining terms in excess of one year subsequent to March 31, 2022, are summarized as follows (in thousands):


Year Ending December 31,
Remainder of 2022	$	192
2023		257
2024		251
2025		192
2026		202
2027		202
2028 and Thereafter		692
Total Lease Payments	$	1,988
Imputed Interest		(161)
Operating Leases – Liability	$	1,827

NOTE 7.8. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER LIABILITIES

Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):


	As of				As of
	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Accounts Payable	$	107	$	450	$	181	$	213
Accrued Expenses		1,300		474		1,049		676
Due to CTO		933		579		924		1,301
Interest Rate Swap		53		481		—		173
Operating Leases - Liability ⁽¹⁾						1,827		—
Total Accounts Payable, Accrued Expenses, and Other Liabilities	$	2,393	$	1,984	$	3,981	$	2,363

(1)	See Note 7, “Operating Land Leases” for further disclosure related to the Company’s operating lease liability balance as of March 31, 2022.

NOTE 8.9. LONG-TERM DEBT

As of ~~September 30, 2021,~~March 31, 2022, the Company’s outstanding indebtedness, at face value, was as follows (in thousands):


	Face Value Debt		Stated Interest Rate	Maturity Date	Face Value Debt		Stated Interest Rate	Maturity Date
Credit Facility	$	21,500	30-Day LIBOR + [1.35% - 1.95%]	November 2023	$	150,000	30-Day LIBOR + [1.35% - 1.95%]	November 2023
2026 Term Loan⁽¹⁾		60,000	30-Day LIBOR + [1.35% - 1.95%]	May 2026		60,000	30-Day LIBOR + [1.35% - 1.95%]	May 2026
2027 Term Loan⁽²⁾		80,000	30-Day LIBOR + [1.25% - 1.90%]	January 2027		80,000	30-Day LIBOR + [1.25% - 1.90%]	January 2027
Mortgage Note Payable – CMBS Portfolio		30,000	4.33%	October 2034		30,000	4.33%	October 2034
Total Debt/Weighted – Average Rate	$	191,500	2.30%
Total Debt/Weighted-Average Rate					$	320,000	2.35%

(1)

Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of 0.81% plus the applicable spread on the $60.0 million 2026 Term Loan (hereinafter defined) balance. See Note 10, “Interest Rate Swaps” for further disclosure related to the Company’s interest rate swaps.

(2)

Effective September 30, 2021, the Company utilized interest rate swaps, inclusive of the existing $50.0 million interest rate swap entered into as of April 30, 2020, to fix LIBOR and achieve a weighted average fixed interest rate of 0.53% plus the applicable spread on the $80.0 million 2027 Term Loan (hereinafter defined) balance. On September 30, 2021, the Company entered into an additional interest rate swap to extend the fixed interest rate through maturity on January 31, 2027. See Note 10, “Interest Rate Swaps” for further disclosure related to the Company’s interest rate swaps.

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Credit Facility. On November 26, 2019, the Company and the Operating Partnership entered into a credit agreement (the “Credit Facility Credit Agreement”) with a group of lenders for a senior unsecured revolving credit facility (the “Credit Facility”) in the maximum aggregate initial original principal amount of up to $100.0 million. The Credit Facility includes an accordion feature that may allow the Operating Partnership to increase the availability under the Credit Facility by an additional $50.0 million, subject to meeting specified requirements and obtaining additional commitments from lenders. BMO Capital Markets Corp. and Raymond James Bank, N.A. are joint lead arrangers and joint bookrunners, with Bank of Montreal (“BMO”) as administrative agent. The Credit Facility has a base term of four years, with the ability to extend the base term for one year.

On June 30, 2020, the Company and the Operating Partnership executed the first amendment to the Credit Facility Credit Agreement whereby the tangible net worth covenant was adjusted to be more reflective of market terms.

On October 16, 2020, the Company and the Operating Partnership executed the second amendment to the Credit Facility (the “Second Amendment”), with the addition of 2 lenders, Huntington National Bank and Truist Bank. As a result of the Second Amendment, the Credit Facility has a total borrowing capacity of $150.0 million with the ability to increase that capacity up to $200.0 million during the term, utilizing an accordion feature, subject to lender approval.

On May 19, 2021, the Company and the Operating Partnership executed the third amendment to the Credit Facility (the “Third Amendment”). Among other things, the Third Amendment revised the Credit Facility Credit Agreement to provide that as of the last day of each fiscal quarter, the Operating Partnership shall not permit the ratio of Unsecured Indebtedness to Borrowing Base Value (as defined in the Credit Facility Credit Agreement) to be greater than 0.60 to 1:00. Prior to the Third Amendment, the Credit Facility Credit Agreement provided that as of the last day of each fiscal quarter, the Operating Partnership could not permit the ratio of ~~Unsecured~~Total Indebtedness to Total Asset Value (as defined in the Credit Facility Credit Agreement) to be greater than 0.60 to 1:00.

Pursuant to the Credit Facility Credit Agreement, the indebtedness outstanding under the Credit Facility accrues at a rate ranging from the 30-day LIBOR plus 135 basis points to the 30-day LIBOR plus 195 basis points, based on the total balance outstanding under the Credit Facility as a percentage of the total asset value of the Operating Partnership, as defined in the Credit Facility Credit Agreement. The Credit Facility also accrues a fee of 15 to 25 basis points for any unused portion of the borrowing capacity based on whether the unused portion is greater or less than 50% of the total borrowing capacity.

The Operating Partnership is subject to customary restrictive covenants under the Credit Facility Credit Agreement, the 2026 Term Loan Credit Agreement (hereinafter defined), and the 2027 Term Loan Credit Agreement (hereinafter defined), collectively referred to herein as the “Credit Agreements”, including, but not limited to, limitations on the Operating Partnership’s ability to: (a) incur indebtedness; (b) make certain investments; (c) incur certain liens; (d) engage in certain affiliate transactions; and (e) engage in certain major transactions such as mergers. The Credit Agreements also contain financial covenants covering the Operating Partnership, including but not limited to, tangible net worth and fixed charge coverage ratios.

At ~~September 30, 2021,~~March 31, 2022, the current commitment level under the Credit Facility was $150.0 million and the Company had an outstanding balance of ~~$21.5~~$150.0 million. Subsequent to March 31, 2022, the Company exercised its accordion options on the 2026 and 2027 Term Loans to pay down the balance on the Credit Facility by an aggregate of $60.0 million.

2026 Term Loan. On May 21, 2021, the Operating Partnership, the Company and certain subsidiaries of the Company entered into a ~~term loan~~ credit agreement (the “2026 Term Loan Credit Agreement”) for a term loan (the “2026 Term Loan”) in an aggregate principal amount of $60.0 million with a maturity of five years. Truist Securities, Inc. ~~is acting~~acted as sole lead arranger and sole book runner, with Truist Bank, N.A. as administrative agent. Truist Bank, N.A., Bank of Montreal, Raymond James Bank, N.A. and Stifel Bank are lenders under the 2026 Term Loan. In addition, the Operating Partnership may request up to 3 incremental term loan commitments in an aggregate amount not to exceed $100.0 million.

2027 Term Loan. On September 30, 2021, the Operating Partnership, the Company and certain subsidiaries of the Company entered into a credit agreement (the “2027 Term Loan Credit Agreement”) for a term loan (the “2027 Term Loan”) in an aggregate principal amount of $80.0 million (the “Term Commitment”) maturing in January 2027. KeyBanc

2018

Table of Contents

~~2027 Term Loan.~~ On September 30, 2021, the Operating Partnership, the Company and certain subsidiaries of the Company entered into a term loan credit agreement (the “2027 Term Loan Credit Agreement”) for a term loan (the “2027 Term Loan”) in an aggregate principal amount of $80.0 million (the “Term Commitment”) maturing in January 2027. KeyBanc Capital Markets Inc., Regions Capital Markets, and U.S. Bank National Association ~~are acting~~acted as joint lead arrangers, with KeyBanc Capital Markets Inc. as sole book runner, and KeyBank National Association as administrative agent. KeyBank National Association, Regions Bank, U.S. Bank National Association, Bank of Montreal, Raymond James Bank, and The Huntington National Bank are lenders under the 2027 Term Loan. In addition, the Operating Partnership may request up to 3 incremental term loan commitments in an aggregate amount, together with the Term Commitment, not to exceed $200.0 million.

Mortgage Notes Payable. On June 30, 2021, in connection with the acquisition of ~~the CMBS Portfolio~~6 net lease properties from CTO (the “CMBS Portfolio”), the Company assumed an existing $30.0 million secured mortgage, which bears interest at a fixed ~~interest~~ rate of 4.33%. The mortgage note matures in October 2034 and is prepayable without penalty beginning in October 2024. Additionally, on June 30, 2021, in connection with the acquisition of 2 net lease properties from an unrelated third party, the Company assumed mortgage notes totaling an aggregate of $1.6 million, which balance was repaid on July 1, 2021.

Long-term debt as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 consisted of the following (in thousands):


	September 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
	Total		Due Within One Year		Total		Due Within One Year		Total		Due Within One Year		Total		Due Within One Year
Credit Facility	$	21,500	$	—	$	106,809	$	—	$	150,000	$	—	$	99,000	$	—
2026 Term Loan		60,000		—		—		—		60,000		—		60,000		—
2027 Term Loan		80,000		—		—		—		80,000		—		80,000		—
Mortgage Note Payable – CMBS Portfolio		30,000		—		—		—		30,000		—		30,000		—
Financing Costs, net of accumulated amortization		(1,305)		—		—		—
Financing Costs, net of Accumulated Amortization										(1,186)		—		(1,260)		—
Total Long-Term Debt	$	190,195	$	—	$	106,809	$	—	$	318,814	$	—	$	267,740	$	—

Payments applicable to reduction of principal amounts as of ~~September 30, 2021~~March 31, 2022 will be required as follows (in thousands):


Year Ending December 31,	Amount		Amount
Remainder of 2021	$	0
2022		0
Remainder of 2022			$	0
2023		21,500		150,000
2024		0		0
2025		0		0
2026 and thereafter		170,000
2026				60,000
2027				80,000
2028 and Thereafter				30,000
Total Long-Term Debt - Face Value	$	191,500	$	320,000

The carrying value of long-term debt as of ~~September 30, 2021~~March 31, 2022 consisted of the following (in thousands):


	Total		Total
Current Face Amount	$	191,500	$	320,000
Financing Costs, net of accumulated amortization		(1,305)
Financing Costs, net of Accumulated Amortization				(1,186)
Total Long-Term Debt	$	190,195	$	318,814

In addition to the ~~$1.3~~$1.2 million of financing costs, net of accumulated amortization included in the table above, as of ~~September 30, 2021,~~March 31, 2022, the Company also had financing costs, net of accumulated amortization related to the Credit Facility of ~~$0.5~~$0.4 million which is included in other assets on the consolidated balance sheets. These costs are amortized on a straight-line basis over the term of the Credit Facility and are included in interest expense in the ~~Company’s accompanying~~ consolidated statements of operations.

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The following table reflects a summary of interest expense incurred and paid during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Interest Expense	$	979	$	339	$	2,063	$	844	$	1,555	$	490
Amortization of Deferred Financing Costs to Interest Expense		87		45		236		133		125		65
Total Interest Expense	$	1,066	$	384	$	2,299	$	977	$	1,680	$	555

Total Interest Paid	$	925	$	308	$	2,030	$	809	$	1,512	$	482

The Company was in compliance with all of its debt covenants as of ~~September 30, 2021.~~March 31, 2022.

NOTE 9.10. INTEREST RATE SWAPS

The Company has entered into interest rate swap agreements to hedge against changes in future cash flows resulting from fluctuating interest rates related to the below noted borrowings. The interest rate agreements were 100% effective during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. Accordingly, the changes in fair value on the interest rate swaps have been classified in accumulated other comprehensive income (loss). The fair value of the interest rate swap agreements are included in other assets and accrued and other liabilities, respectively, on the consolidated balance sheets. Information related to the Company’s interest rate swap agreements are noted below (in thousands):

Hedged Item

Effective Date

Maturity Date

Rate

Amount

Fair Value as of September 30, 2021
2026 Term Loan ⁽¹⁾

5/21/2021

5/21/2026

0.81% + applicable spread

$
60,000

$
197
2027 Term Loan ⁽²⁾

9/30/2021

11/26/2024

0.53% + applicable spread

$
80,000

$
178
2027 Term Loan ⁽³⁾

11/26/2024

1/31/2027

1.60% + applicable spread

$
80,000

$
(47)


Hedged Item	Effective Date	Maturity Date	Rate	Amount		Fair Value as of March 31, 2022
2026 Term Loan ⁽¹⁾	5/21/2021	5/21/2026	0.81% + applicable spread	$	60,000	$	3,782
2027 Term Loan⁽²⁾	9/30/2021	11/26/2024	0.53% + applicable spread	$	80,000	$	4,009
2027 Term Loan ⁽³⁾	11/26/2024	1/31/2027	1.60% + applicable spread	$	80,000	$	963

(1)	Effective May 21, 2021, the Company utilized interest rate swaps to fix LIBOR and achieve a weighted average fixed interest rate of 0.81% plus the applicable spread on the $60.0 million 2026 Term Loan balance.

(2)

(3)	The interest rate swap agreement hedges the $80.0 million 2027 Term Loan balance under different terms and commences concurrent to the interest rate agreements maturing on November 26, 2024.

NOTE ~~10.~~11. EQUITY

SHELF REGISTRATION

On December 1, 2020, the Company filed a shelf registration statement on Form S-3, relating to the registration and potential issuance of its common stock, preferred stock, warrants, rights, and units with a maximum aggregate offering price of up to $350.0 million. The Securities and Exchange Commission declared the Form S-3 effective on December 11, 2020.

ATM PROGRAM

On December 14, 2020, the Company implemented a $100.0 million “at-the-market” equity offering program (the “2020 ATM Program”) pursuant to which the Company may sell, from time to time, shares of the Company’s common stock. During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company sold ~~610,229~~314,671 shares under the 2020 ATM Program for ~~$11.1~~gross proceeds of $6.2 million at a weighted average price of ~~$18.19~~$19.65 per share, generating net proceeds of ~~$10.9~~$6.1 million after deducting transaction fees totaling ~~$0.2 million paid on~~$0.1 million. During the ~~sales. The~~three months ended March 31, 2021, the Company ~~was not active~~sold 434,201 shares under the 2020 ATM Program ~~during the three months ended September 30, 2021.~~for gross proceeds of $7.9 million at a weighted average price of $18.25 per share, generating net proceeds of $7.8 million after deducting transaction fees totaling $0.1 million.

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FOLLOW-ON PUBLIC OFFERING

In June 2021, the Company completed a follow-on public offering of 3,220,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 420,000 shares of common stock. Upon closing, the Company issued 3,220,000 shares and received net proceeds of $54.3 million, after deducting the underwriting discount and expenses.

NONCONTROLLING INTEREST

As of ~~September 30, 2021,~~March 31, 2022, CTO holds, directly and indirectly, a ~~9.4%~~9.1% noncontrolling ownership interest in the Operating Partnership as a result of 1,223,854 OP Units issued to CTO at the time of the Company’s Formation Transactions, as further described in Note 1, “Business and Organization.” An additional ~~3.7%~~3.5% noncontrolling ownership interest is held by an unrelated third party in connection with the issuance of 479,640 OP Units valued at $9.0 million ~~reflecting~~in the aggregate, or $18.85 per ~~unit, based on the Company’s trailing 10 day average closing share price.~~unit. The issuance of 479,640 OP Units includes (i) 424,951 OP Units issued as ~~partial~~ consideration for the portfolio of 9 net lease properties acquired on June 30, 2021 and (ii) 54,689 OP Units issued ~~in connection with~~as consideration for the acquisition of 1 net lease property on July 12, 2021.

DIVIDENDS

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes under the ~~Internal Revenue~~ Code. To qualify as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the Company. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and other items), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, the Company declared and paid cash dividends on its common stock and OP Units of ~~$0.255~~$0.27 per share and ~~$0.745~~$0.24 per share, respectively.

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NOTE ~~11.~~12. COMMON STOCK AND EARNINGS PER SHARE

Basic earnings per common share are computed by dividing net income attributable to the Company for the period by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per common share are determined based on the assumption of the conversion of OP Units on a one-for-one basis using the treasury stock method at average market prices for the periods.

The following is a reconciliation of basic and diluted earnings per common share (in thousands, except share and per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Net Income Attributable to Alpine Income Property Trust, Inc.	$	918	$	546	$	1,662	$	799	$	806	$	440

Weighted Average Number of Common Shares Outstanding		11,299,548		7,455,281		9,253,090		7,632,660		11,662,697		7,565,429
Weighted Average Number of Common Shares Applicable to OP Units using Treasury Stock Method ⁽¹⁾		1,696,955		1,223,854		1,384,844		1,223,854		1,703,494		1,223,854
Total Shares Applicable to Diluted Earnings per Share		12,996,503		8,679,135		10,637,934		8,856,514		13,366,191		8,789,283

Per Common Share Data:
Net Income Attributable to Alpine Income Property Trust, Inc.
Basic	$	0.08	$	0.07	$	0.18	$	0.10	$	0.07	$	0.06
Diluted	$	0.07	$	0.06	$	0.16	$	0.09	$	0.06	$	0.05

(1)

Represents shares underlying OP units including (i) 1,223,854 shares underlying OP Units issued to CTO in connection with our Formation Transactions and (ii) 479,640 shares underlying OP Units issued to an unrelated third party in connection with the acquisition of 10 net lease properties during the ~~nine months~~year ended ~~September 30,~~December 31, 2021 (see Note ~~10,~~11, “Equity”).

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NOTE ~~12.~~13. SHARE REPURCHASES

In March 2020, the Board approved a $5.0 million stock repurchase program (the “$5.0 Million Repurchase Program”). During the first half of 2020, the Company repurchased 456,237 shares of its common stock on the open market for a total cost of $5.0 million, or an average price per share of $11.02, which completed the $5.0 Million Repurchase Program. There were 0 repurchases of the Company’s common stock during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

NOTE ~~13.~~14. STOCK-BASED COMPENSATION

In connection with the closing of the IPO, the Company adopted the Individual Equity Incentive Plan (the “Individual Plan”) and the Manager Equity Incentive Plan (the “Manager Plan”), which are collectively referred to herein as the Equity Incentive Plans. The purpose of the Equity Incentive Plans is to provide equity incentive opportunities to members of the Manager’s management team and employees who perform services for the Company, the Company’s independent directors, advisers, consultants and other personnel, either individually or via grants of incentive equity to the Manager.

On November 26, 2019, ~~in connection with the closing of the IPO,~~ the Company granted restricted shares of common stock to each of the inaugural non-employee directors under the Individual Plan. Each of the inaugural non-employee directors received an award of 2,000 restricted shares of common stock on November 26, 2019. The restricted shares will vest in substantially equal installments on each of the first, second and third anniversaries of the grant date. As of ~~September 30,~~December 31, 2021, the first ~~increment~~and second increments of this award had vested, leaving ~~5,336~~2,668 shares unvested. In addition, the restricted shares are subject to a holding period beginning on the grant date and ending on the date that the grantee ceases to serve as a member of the Board (the “Holding Period”). During the Holding Period, the restricted shares may not be sold, pledged or otherwise

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transferred by the grantee. Except for the one-time IPO-related grant of these 8,000 restricted shares of ~~Common Stock,~~common stock, and the quarterly common stock grants to the non-employee directors in lieu of cash retainer fees (pursuant to the directors’ annual election under the Company’s Non-Employee Director Compensation Policy), the Company has not made any grants under the Equity Incentive Plans. Any future grants under the Equity Incentive Plans will be approved by the compensation committee of the Board. The 2019 non-employee director share awards had an aggregate grant date fair value of $0.2 million. The Company’s determination of the grant date fair value of the three-year vest restricted stock awards was calculated by multiplying the number of shares issued by the Company’s stock price at the grant date. Compensation cost is recognized on a straight-line basis over the vesting period and is included in general and administrative expenses in the Company’s consolidated statements of operations. Award forfeitures are accounted for in the period in which they occur. During each of the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recognized stock compensation expense totaling $0.01 ~~million. During each of the nine months ended September 30, 2021 and 2020, the Company recognized stock compensation expense totaling $0.04~~ million.

A summary of activity for these awards during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 is presented below:


Non-Vested Restricted Shares	Shares	Wtd. Avg. Fair Value		Shares	Wtd. Avg. Fair Value
Outstanding at January 1, 2021	5,336	$	18.80
Non-Vested at January 1, 2022				2,668	$	18.80
Granted	0		0	0		0
Vested	0		0	0		0
Expired	0		0	0		0
Forfeited	0		0	0		0
Non-Vested at September 30, 2021	5,336	$	18.80
Non-Vested at March 31, 2022				2,668	$	18.80

As of ~~September 30, 2021,~~March 31, 2022, there was ~~$0.06~~$0.03 million of unrecognized compensation cost related to the three-year vest restricted shares, which will be recognized over a remaining period of ~~1.2~~0.7 years.

Each member of the Board has the option to receive his or her annual retainer in shares of Company common stock rather than cash. The number of shares awarded to the directors making such election is calculated quarterly by dividing the amount of the quarterly retainer payment due to such director by the trailing 20-day average price of the Company’s common stock as of the last business day of the calendar quarter, rounded down to the nearest whole number of shares. During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the expense recognized for the value of the Company’s common stock received by non-employee directors totaled ~~$0.2~~$0.07 million, or ~~10,572~~3,514 shares, of which ~~3,453 shares~~ were issued on April 1, ~~2021, 3,525 shares were issued on July 1, 2021, and 3,594 shares were issued on October 1, 2021.~~2022. During the nine months ended September 30, 2020, the expense recognized for the value of the Company’s common stock received by non-employee directors totaled $0.2 million, or 10,986 shares, of which 4,098 shares were issued on April 1, 2020, 3,414 shares were issued on July 1, 2020, and 3,474 shares were issued on October 1, 2020.

~~Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is summarized as follows (in thousands):~~

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020
Stock Compensation Expense – Director Restricted Stock

$
13

$
12

$
38

$
38
Stock Compensation Expense – Director Retainers Paid in Stock

66

54

193

163
Total Stock Compensation Expense ⁽¹⁾

$
79

$
66

$
231

$
201

~~(1)~~

Director retainers are issued through additional paid in capital in arrears. Therefore, the change in additional paid in capital during the nine months ended September 30, 2021 reported on the consolidated statements of stockholders’ equity does not agree to the total non-cash compensation reported on the consolidated statements of cash flows.

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the three months ended March 31, 2021, the expense recognized for the value of the Company’s common stock received by non-employee directors totaled $0.06 million, or 3,453 shares, which were issued on April 1, 2021.

Stock compensation expense for the three months ended March 31, 2022 and 2021 is summarized as follows (in thousands):

NOTE ~~14.~~15. RELATED PARTY MANAGEMENT COMPANY

We are externally managed by the Manager, a wholly owned subsidiary of CTO. ~~In addition~~Subsequent to the IPO, CTO purchased an aggregate 12,853 shares of PINE common stock in the open market including (i) 4,765 shares purchased during the three months ended March 31, 2022 for $0.09 million, or an average price per share of $18.47 and (ii) 8,088 shares purchased during the year ended December 31, 2021 for $0.1 million, or an average price per share of $17.65. As of March 31, 2022, CTO owns, in the aggregate, 1,223,854 OP Units and 828,643 shares of PINE common stock, inclusive of (i) 394,737 shares of common stock totaling $7.5 million issued in connection with the CTO Private Placement, ~~CTO purchased from us~~(ii) 421,053 shares of common stock totaling $8.0 million issued in connection with the IPO, and (iii) 12,853 shares of ~~our~~ common stock ~~or 421,053 shares, in~~totaling $0.2 million purchased by CTO subsequent to the IPO. ~~Upon completion~~The aggregate 1,223,854 OP Units and 828,643 shares of ~~the Formation Transactions, CTO owned 22.3% of our outstanding~~PINE common stock ~~(assuming the OP Units issued to~~held by CTO ~~in the Formation Transactions are exchanged for shares~~represent an investment totaling $38.6 million, or 15.2% of ~~our common stock on a 1-for-one basis).~~PINE’s outstanding equity, as of March 31, 2022.

Management Agreement

On November 26, 2019, wethe Operating Partnership and PINE entered into ~~the Management Agreement~~a management agreement with the Manager (the “Management Agreement”). Pursuant to the terms of the Management Agreement, our Manager manages, operates and administers our day-to-day operations, business and affairs, subject to the direction and supervision of the Board and in accordance with the investment guidelines approved and monitored by the Board. We pay our Manager a base management fee equal to 0.375% per quarter of our “total equity” (as defined in the Management Agreement and based on a 1.5% annual rate), calculated and payable in cash, quarterly in arrears.

Our Manager has the ability to earn an annual incentive fee based on our total stockholder return exceeding an 8% cumulative annual hurdle rate (the “Outperformance Amount”) subject to a high-water mark price. We would pay our Manager an incentive fee to with respect to each annual measurement period in the amount of the greater of (i) $0.00 and (ii) the product of (a) 15% multiplied by (b) the Outperformance Amount multiplied by (c) the weighted average shares. NaN incentive fee was due for the year ended December 31, ~~2020.~~2021.

The initial term of the Management Agreement will expire on November 26, 2024 and will automatically renew for an unlimited number of successive one-year periods thereafter, unless the agreement is not renewed or is terminated in accordance with its terms.

Our independent directors ~~will~~ review our Manager’s performance and the management fees annually and, following the initial term, the Management Agreement may be terminated annually upon the affirmative vote of two-thirds of our independent directors or upon a determination by the holders of a majority of the outstanding shares of our common stock, based upon (i) unsatisfactory performance by the Manager that is materially detrimental to us or (ii) a determination that the management fees payable to our Manager are not fair, subject to our Manager’s right to prevent such termination due to unfair fees by accepting a reduction of management fees agreed to by two-thirds of our independent directors. We may also terminate the Management Agreement for cause at any time, including during the initial term, without the payment of any termination fee, with 30 days’ prior written notice from the Board. During the initial term of the Management Agreement, we may not terminate the Management Agreement except for cause.

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We ~~will~~ pay directly or reimburse our Manager for certain expenses, if incurred by our Manager. We ~~will~~do not reimburse any compensation expenses incurred by our Manager or its affiliates. Expense reimbursements to our Manager ~~will be~~are made in cash on a quarterly basis following the end of each quarter. In addition, we ~~will~~ pay all of our operating expenses, except those specifically required to be borne by our Manager pursuant to the Management Agreement.

~~During the three and nine months ended September 30, 2021, the~~The Company incurred management fee expenses ~~which totaled~~totaling $0.9 million and ~~$2.3~~$0.6 million during the three months ended March 31, 2022 and 2021, respectively. The Company also paid dividends on the common stock and OP Units owned by affiliates of the Manager in the amount of ~~$0.5~~$0.6 million and ~~$1.7~~$0.5 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, respectively. During the three and nine months ended September 30, 2020, the Company incurred management fee expenses which totaled $0.6 million and $1.9 million, respectively. The Company also paid dividends on the common stock and OP Units owned by affiliates of the Manager in the amount of $0.4 million and $1.2 million for the three and nine months ended September 30, 2020, respectively.

The following table represents amounts due ~~from the Company~~ to (from) CTO (in thousands):


	As of				As of
Description	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Management Fee due to CTO	$	910	$	631	$	936	$	913
Other		23		(52)		(12)		388
Total ⁽¹⁾	$	933	$	579	$	924	$	1,301

(1)	Included in ~~Accrued Expenses,~~accrued expenses, see Note 7,8, “Accounts Payable, Accrued Expenses, and Other Liabilities”.

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~~Exclusivity and~~ ROFO Agreement

On November 26, 2019, wePINE also entered into an ~~exclusivity~~Exclusivity and ~~right~~Right of ~~first offer (“ROFO”) agreement~~First Offer Agreement with ~~CTO.~~CTO (the “ROFO Agreement”). During the term of the ~~exclusivity and~~ ROFO ~~agreement,~~Agreement, CTO will not, and will cause each of its affiliates (which for purposes of the ~~exclusivity and~~ ROFO ~~agreement~~Agreement will not include our company and our subsidiaries) not to, acquire, directly or indirectly, a single-tenant, net leased property, unless CTO has notified us of the opportunity and we have affirmatively rejected the opportunity to acquire the applicable property or properties.

The terms of the ~~exclusivity and~~ ROFO ~~agreement~~Agreement do not restrict CTO or any of its affiliates from providing financing for a third party’s acquisition of single-tenant, net leased properties or from developing and owning any single-tenant, net leased property.

Pursuant to the ~~exclusivity and~~ ROFO ~~agreement,~~Agreement, neither CTO nor any of its affiliates (which for purposes of the ~~exclusivity and~~ ROFO ~~agreement~~Agreement does not include our company and our subsidiaries) may sell to any third party any single-tenant, net leased property that was owned by CTO or any of its affiliates as of the closing date of the IPO or that is developed and owned by CTO or any of its affiliates after the closing date of the IPO, without first offering us the right to purchase such property.

The term of the ~~exclusivity and~~ ROFO ~~agreement~~Agreement will continue for so long as the Management Agreement with our Manager is in effect.

On April 6, 2021, the Company entered into a purchase and sale agreement with a certain subsidiary of CTO for the purchase of 1 net lease property ~~(the “Single Property”)~~ for $11.5 million. The acquisition ~~of the Single Property~~ was completed on April 23, 2021.

On April 2, 2021, the Company entered into a ~~separate~~ purchase and sale agreement with certain subsidiaries of CTO for the purchase of the CMBS Portfolio. The terms of the purchase and sale agreement, as amended on April 20, 2021, provided a total purchase price of $44.5 million for the CMBS Portfolio. The acquisition of the CMBS Portfolio was completed on June 30, 2021.

On January 5, 2022, the Company entered into a purchase and sale agreement with a certain subsidiary of CTO for the purchase of 1 net lease property for $6.9 million. The acquisition was completed on January 7, 2022.

The entry into ~~the~~these purchase and sale agreements, and subsequent completion of the related acquisitions, are a result of the Company exercising its right to purchase the ~~Single Property and CMBS Portfolio~~aforementioned properties under the ROFO ~~agreement.~~Agreement.

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Conflicts of Interest

Conflicts of interest may exist or could arise in the future with CTO and its affiliates, including our Manager, the individuals who serve as our executive officers and executive officers of CTO, any individual who serves as a director of our company and as a director of CTO and any limited partner of the Operating Partnership. Conflicts may include, without limitation: conflicts arising from the enforcement of agreements between us and CTO or our Manager; conflicts in the amount of time that executive officers and employees of CTO, who are provided to us through our Manager, will spend on our affairs versus CTO’s affairs; and conflicts in future transactions that we may pursue with CTO and its affiliates. We do not generally expect to enter into joint ventures with CTO, but if we do so, the terms and conditions of our joint venture investment will be subject to the approval of a majority of disinterested directors of the Board.

In addition, we are subject to conflicts of interest arising out of our relationships with our Manager. Pursuant to the Management Agreement, our Manager is obligated to supply us with our senior management team. However, our Manager is not obligated to dedicate any specific CTO personnel exclusively to us, nor are the CTO personnel provided to us by our Manager obligated to dedicate any specific portion of their time to the management of our business. Additionally, our Manager is a wholly owned subsidiary of CTO. All of our executive officers are executive officers and employees of CTO and one of our officers (John P. Albright) is also a member of CTO’s board of directors. As a result, our Manager and the CTO personnel it provides to us may have conflicts between their duties to us and their duties to, and interests in, CTO.

We may acquire or sell ~~single-tenant,~~ net leased properties ~~in which~~that would potentially fit the investment criteria for our Manager or its ~~affiliates have or may have an interest.~~affiliates. Similarly, our Manager or its affiliates may acquire or sell ~~single-tenant,~~ net leased properties ~~in which we have or may have an interest.~~that would potentially fit our investment criteria. Although such acquisitions or dispositions ~~may~~could present conflicts of interest, we nonetheless may pursue and consummate such transactions. Additionally, we may engage in transactions directly with our Manager or its affiliates, including the purchase and sale of all or a portion of a portfolio ~~asset.~~of assets. If we acquire a ~~single-tenant,~~ net leased

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property from CTO or one of its affiliates or sell a ~~single-tenant,~~ net leased property to CTO or one of its affiliates, the purchase price we pay to CTO or one of its affiliates or the purchase price paid to us by CTO or one of its affiliates may be higher or lower, respectively, than the purchase price that would have been paid to or by us if the transaction were the result of ~~arms’~~arm’s length negotiations with an unaffiliated third party.

In deciding whether to issue additional debt or equity securities, we will rely, in part, on recommendations made by our Manager. While such decisions are subject to the approval of the Board, our Manager is entitled to be paid a base management fee that is based on our “total equity” (as defined in the Management Agreement). As a result, our Manager may have an incentive to recommend that we issue additional equity securities at dilutive prices.

All of our executive officers are executive officers and employees of CTO. These individuals and other CTO personnel provided to us through our Manager devote as much time to us as our Manager deems appropriate. However, our executive officers and other CTO personnel provided to us through our Manager may have conflicts in allocating their time and services between us, on the one hand, and CTO and its affiliates, on the other. During a period of prolonged economic weakness or another economic downturn affecting the real estate industry or at other times when we need focused support and assistance from our Manager and the CTO executive officers and other personnel provided to us through our Manager, we may not receive the necessary support and assistance we require or that we would otherwise receive if we were self-managed.

Additionally, the ~~exclusivity and~~ ROFO ~~agreement~~Agreement does contain exceptions to CTO’s exclusivity for opportunities that include only an incidental interest in single-tenant, net leased properties. Accordingly, the ~~exclusivity and~~ ROFO ~~agreement~~Agreement will not prevent CTO from pursuing certain acquisition opportunities that otherwise satisfy our then-current investment criteria.

Our directors and executive officers have duties to our company under applicable Maryland law in connection with their management of our company. At the same time, PINE GP has fiduciary duties, as the general partner, to the Operating Partnership and to the limited partners under Delaware law in connection with the management of the Operating Partnership. These duties as a general partner to the Operating Partnership and its partners may come into conflict with the duties of our directors and executive officers to us. Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of loyalty and care and which generally prohibits such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest. The partnership agreement provides that in the event of a conflict between the interests of our stockholders on the one hand and the limited partners of the Operating Partnership on the other hand, PINE GP will endeavor in good faith to resolve the conflict in a

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manner not adverse to either our stockholders or the limited partners; provided, however, that so long as we own a controlling interest in the Operating Partnership, any such conflict that we, in our sole and absolute discretion, determine cannot be resolved in a manner not adverse to either our stockholders or the limited partners of the Operating Partnership shall be resolved in favor of our stockholders, and we shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the limited partners in connection with such decisions.

NOTE ~~15.~~16. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of business. The Company is not currently a party to any pending or threatened legal proceedings that we believe could have a material adverse effect on the Company’s business or financial condition.

NOTE ~~16.~~17. SUBSEQUENT EVENTS

The Company reviewed all subsequent events and transactions through ~~October~~April 21, ~~2021,~~2022 the date the consolidated financial statements were issued.

Term Loans

On April 14, 2022, the Company exercised the 2026 and 2027 Term Loan accordion options for $40.0 million and $20.0 million, respectively, increasing aggregate lender commitments and borrowings to $100.0 million under each Term Loan. The total $60.0 million proceeds were utilized to pay down the Company’s Credit Facility.

Property Disposition

On April 14, 2022, the Company completed the sale of the property located in Portland, Oregon, leased to Wells Fargo for a sales price of $38.8 million, representing a gain of $7.0 million. Proceeds from the sale were utilized as part of a reverse 1031 like-kind exchange transaction.

There were no other reportable subsequent events or transactions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

When we refer to “we,” “us,” “our,” “PINE,” or “the Company,” we mean Alpine Income Property Trust, Inc. and its consolidated subsidiaries. References to “Notes to Financial Statements” refer to the Notes to the Consolidated Financial Statements of Alpine Income Property Trust, Inc. included in this Quarterly Report on Form 10-Q. Some of the comments we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section below entitled “Special Note Regarding Forward-Looking Statements.” Certain factors that could cause actual results or events to differ materially from those the Company anticipates or projects are described in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020 and of this Quarterly Report on Form 10-Q.~~2021.

Special Note Regarding Forward-Looking Statements

This Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). ~~Certain statements contained in this report (other than statements of historical fact) are forward-looking statements.~~ The words “believe,” “estimate,” “expect,” “intend,”�� “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Forward-looking statements are made based upon management’s expectations and beliefs concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management.

Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, the strength of the real estate market; the impact of a prolonged recession or downturn in economic conditions; our ability to successfully execute acquisition or development strategies; any loss of key management personnel; changes in local, regional, and national economic conditions affecting the real estate development business and ~~income~~ properties; the impact of competitive real estate activity; the loss of any major ~~income~~ property tenants; the ultimate geographic spread, severity and duration of pandemics such as the outbreak of COVID-19 and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and our financial condition and results of operations; and the availability of capital. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.

See “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020 and of this Quarterly Report on Form 10-Q.~~2021 for further discussion of these ~~risks.~~risks, as well as additional risks and uncertainties that could cause actual results or events to differ materially from those described in the Company’s forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

OVERVIEW

We are a real estate company that owns and operates a high-quality portfolio of commercial properties located in the United States. Our properties are generally leased on a long-term basis and located primarily in, or in close proximity to major metropolitan statistical areas, or MSAs, and in growth markets and other markets in the United States with favorable economic and demographic conditions. Our properties are primarily leased to industry leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce or defensive in nature against economic uncertainty or disruption. The properties in our portfolio are primarily triple-net leases which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures. Our portfolio consists of 89129 net leased retail and office ~~properties located in 62 markets in 28 states. Twenty of these properties, representing our initial portfolio, were acquired~~

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properties located in 84 markets in 35 states. Fifteen properties in our portfolio are long-term ground leases where we are the lessor to the tenant.

Twenty properties, representing our initial portfolio, were acquired from CTO Realty Growth, Inc. (“CTO”) in the formation transactions, utilizing $125.9 million of proceeds from our initial public offering of our common stock (the “IPO”) and the issuance of 1,223,854 units of our operating partnership (the “OP Units”) that had an initial value of $23.3 million based on the IPO price of $19.00 per share (the “IPO Price”). ~~The remaining 69~~As of March 31, 2022, four of the properties ~~were acquired subsequent~~included within our initial portfolio have been sold. Subsequent to ~~the year ended December~~March 31, ~~2019. Six properties in~~2022, one additional property included within our initial portfolio ~~are long-term ground leases where we are the lessor to the tenant.~~was sold (see Note 17, “Subsequent Events”).

We seek to acquire, own and operate primarily freestanding, commercial real estate properties ~~primarily~~ located in ~~our target markets~~the United States leased primarily pursuant to triple-net, long-term leases. ~~Within our target markets, we will~~We focus on investments primarily in retail properties. We ~~will~~ target tenants in industries that we believe are favorably impacted by current macroeconomic trends that support consumer spending, such as strong and growing employment and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the growing e-commerce retail ~~sector.~~sector or who use a physical presence as a component of their omnichannel strategy. We also ~~will~~ seek to invest in properties that are net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their ~~market~~respective markets and have ~~rent levels at or below~~rents at-or-below market rent levels. Furthermore, we believe that the size of our company ~~will,~~allows us, for at least the near term, ~~allow us~~ to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.

Our objective is to maximize cash flow and value per share by generating stable and growing cash flows and attractive risk-adjusted returns through owning, operating and growing a diversified portfolio of high-quality net leased commercial properties with strong long-term real estate fundamentals. The 89129 properties in our portfolio are 100% occupied and represent ~~2.7~~3.5 million of gross rentable square feet. As of ~~September 30, 2021,~~March 31, 2022, our leases have a weighted-average remaining lease term of 7.8 years based on annualized base rent.

Our strategy for investing in income-producing properties is focused on factors including, but not limited to, long-term real estate fundamentals, ~~and target markets,~~ including ~~major markets or~~ those markets experiencing significant economic growth. We employ a methodology for evaluating targeted investments in income-producing properties which includes an evaluation of: (i) the attributes of the real estate (e.g., location, market demographics, comparable properties in the market, etc.); (ii) an evaluation of the existing tenant(s) (e.g., credit-worthiness, property level sales, tenant rent levels compared to the market, etc.); (iii) other market-specific conditions (e.g., tenant industry, job and population growth in the market, local economy, etc.); and (iv) considerations relating to the Company’s business and strategy (e.g., strategic fit of the asset type, property management needs, alignment with the Company’s structure, etc.).

The Company has no employees and is externally managed by Alpine Income Property Manager, LLC, a Delaware limited liability company and a wholly owned subsidiary of CTO (our “Manager”). CTO is a Maryland corporation that is a publicly traded diversified REIT and the sole member of our Manager.

~~COVID-19 PANDEMIC~~

~~Table of Contents~~

~~As of September 30, 2021, the Company owned 89 income properties in~~ 28 ~~states. The following is a summary of the leases attributable to these properties:~~

Type

Description

Location

Rentable Square Feet

Remaining Term (Years)

Contractual Rent Escalations

Annualized Base Rent ($000's) ⁽¹⁾
Office

Wells Fargo

Portland, OR

212,363

4.3

No

$
3,137
Office

Hilton Grand Vacations

Orlando, FL

102,019

5.2

Yes

1,825
Retail

Walmart

Howell, MI

214,172

5.3

No

1,369
Retail

LA Fitness

Brandon, FL

45,000

10.6

Yes

958
Retail

Lowe's

Katy, TX

131,644

10.8

No

917
Retail

Burlington Stores, Inc.

North Richland Hills, TX

70,891

7.3

Yes

859
Retail

Kohl's

Glendale, AZ

87,875

8.3

Yes

844
Retail

Hobby Lobby

Tulsa, OK

84,180

9.3

Yes

842
Retail

At Home

Canton, OH

89,902

7.8

Yes

801
Retail

Harris Teeter

Charlotte, NC

45,089

6.6

Yes

768
Retail

At Home

Raleigh, NC

116,334

11.0

Yes

732
Retail

Container Store

Phoenix, AZ

23,329

8.4

Yes

726
Retail

Camping World

Duluth, MN

66,033

12.3

Yes

705
Retail

Cinemark

Reno, NV

52,474

3.0

Yes

695
Office

Hilton Grand Vacations

Orlando, FL

31,895

5.2

Yes

684
Retail

At Home

Turnersville, NJ

89,460

8.1

Yes

641
Retail

Live Nation Entertainment, Inc.

East Troy, WI

—
⁽²⁾
11.5

Yes

634
Retail

Academy Sports

Florence, SC

58,410

7.6

Yes

628
Retail

Sportsman Warehouse

Albuquerque, NM

48,974

7.9

Yes

573
Retail

Hobby Lobby

Winston-Salem, NC

55,000

8.5

Yes

562
Retail

Rite Aid

Renton, WA

16,280

4.8

Yes

558
Retail

Hobby Lobby

Arden, NC

55,000

9.9

Yes

546
Retail

American Multi-Cinema, Inc.

Tyngsborough, MA

39,474

11.5

Yes

507
Retail

Dick's Sporting Goods

McDonough, GA

46,315

2.3

No

473
Retail

Jo-Ann Fabric

Saugus, MA

22,500

7.3

Yes

468
Retail

Conn's HomePlus

Hurst, TX

37,957

9.9

Yes

452
Retail

Old Time Pottery

Orange Park, FL

84,180

8.8

Yes

439
Retail

7-Eleven

Austin, TX

6,400

13.5

Yes

377
Retail

Walgreens

Birmingham, AL

14,516

7.5

No

364
Retail

Walgreens

Alpharetta, GA

15,120

4.1

No

363
Retail

Best Buy

McDonough, GA

30,038

4.5

Yes

338
Retail

Big Lots

Germantown, MD

25,589

9.3

Yes

334
Retail

Big Lots

Phoenix, AZ

34,512

9.3

Yes

329
Retail

Lehigh Gas Wholesale Services, Inc.

Highland Heights, KY

2,578

9.2

Yes

329
Retail

Walgreens

Clermont, FL

13,650

7.5

No

328
Retail

Verizon

Turnersville, NJ

6,027

5.8

Yes

326
Retail

Office Depot

Albuquerque, NM

30,346

2.3

Yes

300
Retail

7-Eleven

Georgetown, TX

7,726

14.3

Yes

276
Retail

Walgreens

Tacoma, WA

14,125

8.8

No

259
Retail

Walgreens

Albany, GA

14,770

11.3

No

258
Retail

Walmart

Hempstead, TX

52,190

5.3

Yes

253
Retail

Hobby Lobby

Aberdeen, SD

49,034

3.4

Yes

221
Retail

7-Eleven ⁽³⁾

Olathe, KS

4,146

5.8

Yes

219
Retail

Circle K

Indianapolis, IN

4,283

3.2

Yes

210
Retail

Scrubbles Car Wash ⁽³⁾

Jacksonville, FL

4,512

16.1

Yes

189
Retail

Cheddar's⁽³⁾

Jacksonville, FL

8,146

6.0

Yes

186
Retail

Family Dollar

Lynn, MA

9,228

2.5

Yes

160
Retail

Orscheln

Durant, OK

37,965

1.4

Yes

160
Retail

Advance Auto Parts

St. Paul, MN

7,201

7.1

Yes

150
Retail

Tractor Supply

Washington Court House, OH

39,984

10.8

Yes

149
Retail

Advanced Auto Parts

Severn, MD

6,876

13.4

Yes

148
Retail

Big Lots

Durant, OK

36,794

5.3

Yes

142
Retail

O'Reilly Auto Parts

Angels Camp, CA

7,066

4.5

Yes

128
Retail

Dollar General

Kermit, TX

10,920

13.9

Yes

126
Retail

Burger King

Plymouth, NC

3,142

6.6

Yes

125
Retail

Harbor Freight

Midland, MI

14,624

4.8

Yes

124
Retail

Dollar General

Chazy, NY

9,277

10.0

Yes

119
Retail

Dollar General

Odessa, TX

9,127

13.8

Yes

117
Retail

Dollar General

Willis, TX

9,138

13.8

Yes

115
Retail

Dollar General

Winthrop, NY

9,167

9.9

Yes

113
Retail

Family Dollar

Burlington, NC

11,394

9.5

Yes

113
Retail

Advance Auto Parts

Ware, MA

6,889

3.3

Yes

112
Retail

Dollar General

Cut and Shoot, TX

9,096

14.1

Yes

112
Retail

Dollar General

Milford, ME

9,128

12.1

Yes

110
Retail

Dollar Tree

Demopolis, AL

10,159

8.3

Yes

110
Retail

Pet Supplies Plus

Canton, OH

8,400

6.1

Yes

110

~~Table of Contents~~

Type

Description

Location

Rentable Square Feet

Remaining Term (Years)

Contractual Rent Escalations

Annualized Base Rent ($000's) ⁽¹⁾
Retail

Dollar General

Salem, NY

9,199

11.9

Yes

105
Retail

Dollar Tree

Stillwell, OK

9,828

10.5

Yes

105
Retail

Dollar General

Bingham, ME

9,345

12.1

Yes

104
Retail

Dollar General

Harrisville, NY

9,309

12.3

Yes

104
Retail

Dollar General

Heuvelton, NY

9,342

11.1

Yes

104
Retail

Firestone

Pittsburgh, PA

10,629

7.5

Yes

103
Retail

Dollar General

Barker, NY

9,275

12

Yes

102
Retail

Boston Market ⁽³⁾

Turnersville, NJ

2,627

8.3

Yes

101
Retail

Dollar General

Limestone, ME

9,167

12.1

Yes

100
Retail

Freddy's Frozen Custard ⁽³⁾

Orange Park, FL

3,200

5.2

Yes

99
Retail

Dollar General

Hammond, NY

9,219

11.3

Yes

98
Retail

Dollar General

Somerville, TX

9,252

13.8

Yes

96
Retail

Dollar General

Seguin, TX

9,155

13.4

Yes

91
Retail

Grease Monkey

Stockbridge, GA

1,846

12.0

Yes

90
Retail

Schlotzsky's

Sweetwater, TX

2,431

13.8

Yes

85
Retail

Dollar Tree

Albuquerque, NM

10,023

9.4

Yes

85
Retail

Valero ⁽⁵⁾

Jackson, MS

1,920

20.0

Yes

85
Retail

Dollar General

Newtonsville, OH

9,290

8.7

Yes

83
Retail

Dollar General

Del Rio, TX

9,219

13.3

Yes

83
Retail

Hardee's

Boaz, AL

3,542

9.1

Yes

80
Retail

Advance Auto Parts

Athens, GA

6,871

3.3

Yes

79
Retail

Valero ⁽⁵⁾

Leland, MS

3,375

20.0

Yes

78
Retail

Salon Lofts

Canton, OH

4,000

6.4

Yes

72
Retail

O'Reilly Auto Parts

Duluth, MN

11,182

6.4

Yes

72
Retail

Advance Auto Parts

Ludington, MI

6,604

10.3

Yes

63
Retail

Advance Auto Parts

New Baltimore, MI

6,784

10.3

Yes

63
Retail

Long John Silver's ⁽³⁾

Tulsa, OK

3,000

—
⁽⁴⁾
No

24

2,719,667

7.8

$
32,699

~~(1)~~

~~Annualized straight-line base rental income in place as of September 30, 2021.~~

~~(2)~~

The Alpine Valley Music Theatre, leased to Live Nation Entertainment, Inc., is an entertainment venue consisting of a two-sided, open-air, 7,500-seat pavilion; an outdoor amphitheater with a capacity for 37,000; and over 150 acres of green space.

~~(3)~~

~~We are the lessor in a ground lease with the tenant. Rentable square feet represents improvements on the property that revert to us at the expiration of the lease.~~

~~(4)~~

~~Current lease agreement is month-to-month (“MTM”).~~

~~(5)~~

~~Subject to a master lease agreement.~~

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COMPARISON OF THE THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2022 AND 2021 ~~AND 2020~~

The following presents the Company’s results of operations for the three months ended ~~September 30, 2021,~~March 31, 2022, as compared to the three months ended ~~September 30, 2020~~March 31, 2021 (in thousands):


	Three Months Ended							Three Months Ended
	September 30, 2021		September 30, 2020		$ Variance		% Variance	March 31, 2022		March 31, 2021		$ Variance		% Variance
Revenues:
Lease Income	$	8,171	$	5,101	$	3,070	60.2%	$	10,799	$	5,890	$	4,909	83.3%
Total Revenues		8,171		5,101		3,070	60.2%		10,799		5,890		4,909	83.3%
Operating Expenses:
Real Estate Expenses		914		555		359	64.7%		1,092		651		441	67.7%
General and Administrative Expenses		1,371		1,119		252	22.5%		1,431		1,030		401	38.9%
Depreciation and Amortization		4,308		2,694		1,614	59.9%		5,672		3,143		2,529	80.5%
Total Operating Expenses		6,593		4,368		2,225	50.9%		8,195		4,824		3,371	69.9%
Gain on Disposition of Assets		544		287		257	89.5%
Net Income from Operations		2,122		1,020		1,102	108.0%		2,604		1,066		1,538	144.3%
Interest Expense		1,066		384		682	177.6%		1,680		555		1,125	202.7%
Net Income		1,056		636		420	66.0%		924		511		413	80.8%
Less: Net Income Attributable to Noncontrolling Interest		(138)		(90)		(48)	53.3%		(118)		(71)		(47)	(66.2)%
Net Income Attributable to Alpine Income Property Trust, Inc.	$	918	$	546	$	372	68.1%	$	806	$	440	$	366	83.2%

Revenue and Direct Cost of Revenues

Revenue from our ~~income~~ property operations during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ totaled ~~$8.2~~$10.8 million and ~~$5.1~~$5.9 million, respectively. The ~~$3.1~~$4.9 million increase in revenues is reflective of the Company’s volume of acquisitions. The direct costs of revenues for our ~~income~~ property operations totaled ~~$0.9~~$1.1 million and ~~$0.5~~$0.7 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The $0.4 million increase in the direct cost of revenues is also attributable to the Company’s expanded ~~income~~ property portfolio.

General and Administrative Expenses

The following table represents the Company’s general and administrative expenses for the three months ended ~~September 30, 2021,~~March 31, 2022, as compared to the three months ended ~~September 30, 2020~~March 31, 2021 (in thousands):


	Three Months Ended							Three Months Ended
	September 30, 2021		September 30, 2020		$ Variance		% Variance	March 31, 2022		March 31, 2021		$ Variance		% Variance
Management Fee to Manager	$	910	$	631	$	279	44.2%	$	936	$	638	$	298	46.7%
Director Stock Compensation Expense		79		66		13	19.7%		79		73		6	8.2%
Director & Officer Insurance Expense		127		111		16	14.4%		96		129		(33)	(25.6)%
Additional General and Administrative Expense		255		311		(56)	(18.0)%		320		190		130	68.4%
Total General and Administrative Expenses	$	1,371	$	1,119	$	252	22.5%	$	1,431	$	1,030	$	401	38.9%

General and administrative expenses totaled $1.4 million and ~~$1.1~~$1.0 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~$0.3~~$0.4 million increase is primarily attributable to growth in the Company’s equity base, which led to increased management fee expenses totaling $0.3 million.

3329

Table of Contents

Depreciation and Amortization

Depreciation and amortization expense totaled ~~$4.3~~$5.7 million and ~~$2.7~~$3.1 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~$1.6~~$2.5 million increase in the depreciation and amortization expense is reflective of the Company’s expanded ~~income~~ property portfolio.

Interest Expense

Interest expense totaled ~~$1.1~~$1.7 million and ~~$0.4~~$0.6 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~$0.7~~$1.1 million increase in interest expense is attributable to the higher average outstanding debt balance during the three months ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020.~~2021. The overall increase in the Company’s long-term debt was primarily utilized to fund ~~the acquisition~~acquisitions of ~~income~~ properties during 2021 and ~~2020.~~year to date 2022.

Net Income

Net income totaled ~~$1.1~~$0.9 million and ~~$0.6~~$0.5 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The increase in net income is attributable to the factors described ~~above in addition to the $0.5 million gain on disposition of assets during the three months ended September 30, 2021, an increase of $0.3 million from the comparable prior year period.~~

~~COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020~~

~~The following presents the Company’s results of operations for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020 (in thousands):~~

Nine Months Ended

September 30, 2021

September 30, 2020

$ Variance

% Variance
Revenues:

Lease Income

$
20,658

$
13,863

$
6,795

49.0%
Total Revenues

20,658

13,863

6,795

49.0%
Operating Expenses:

Real Estate Expenses

2,389

1,705

684

40.1%
General and Administrative Expenses

3,687

3,535

152

4.3%
Depreciation and Amortization

10,914

7,003

3,911

55.8%
Total Operating Expenses

16,990

12,243

4,747

38.8%
Gain on Disposition of Assets

544

287

257

89.5%
Net Income from Operations

4,212

1,907

2,305

120.9%
Interest Expense

2,299

977

1,322

135.3%
Net Income

1,913

930

983

105.7%
Less: Net Income Attributable to Noncontrolling Interest

(251)

(131)

(120)

91.6%
Net Income Attributable to Alpine Income Property Trust, Inc.

$
1,662

$
799

$
863

108.0%

~~Revenue and Direct Cost of Revenues~~

Revenue from our income property operations during the nine months ended September 30, 2021 and 2020, totaled $20.7 million and $13.9 million, respectively. The $6.8 million increase in revenues is reflective of the Company’s volume of acquisitions. The direct costs of revenues for our income property operations totaled $2.4 million and $1.7 million for the nine months ended September 30, 2021 and 2020, respectively. The $0.7 million increase in the direct cost of revenues is also attributable to the Company’s expanded income property portfolio.

~~Table of Contents~~

~~General and Administrative Expenses~~

~~The following table represents the Company’s general and administrative expenses for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020 (in thousands):~~

Nine Months Ended

September 30, 2021

September 30, 2020

$ Variance

% Variance
Management Fee to Manager

$
2,269

$
1,923

$
346

18.0%
Director Stock Compensation Expense

231

201

30

14.9%
Director & Officer Insurance Expense

385

340

45

13.2%
Additional General and Administrative Expense

802

1,071

(269)

(25.1)%
Total General and Administrative Expenses

$
3,687

$
3,535

$
152

4.3%

General and administrative expenses totaled $3.7 million and $3.5 million during the nine months ended September 30, 2021 and 2020, respectively. The $0.2 million increase is primarily related to an increase in management fee expenses of $0.3 million attributable to growth in the Company’s equity base, partially offset by an additional $0.3 million of costs incurred, during the first quarter of 2020, associated with audit services related to the 2019 annual audit.

~~Depreciation and Amortization~~

Depreciation and amortization expense totaled $10.9 million and $7.0 million during the nine months ended September 30, 2021 and 2020, respectively. The $3.9 million increase in the depreciation and amortization expense is reflective of the Company’s expanded income property portfolio.

~~Interest Expense~~

Interest expense totaled $2.3 million and $1.0 million during the nine months ended September 30, 2021 and 2020, respectively. The $1.3 million increase in interest expense is attributable to the higher average outstanding debt balance during the nine months ended September 30, 2021 as compared to the same period in 2020. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of income properties during 2021 and 2020.

~~Net Income~~

Net income totaled $1.9 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively. The increase in net income is attributable to the factors described above in addition to the $0.5 million gain on disposition of assets during the nine months ended September 30, 2021, an increase of $0.3 million from the comparable prior year period.above.

LIQUIDITY AND CAPITAL RESOURCES

Cash totaled ~~$7.3~~$2.9 million at ~~September 30, 2021,~~March 31, 2022, including restricted cash of ~~$0.6~~$0.7 million, see Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance at ~~September 30, 2021.~~March 31, 2022.

Long-Term Debt. As of ~~September 30, 2021,~~March 31, 2022, the Company had ~~$128.5~~an outstanding balance of $150.0 million ~~available~~ on the Credit Facility. Subsequent to March 31, 2022, the Company exercised its accordion options on the 2026 and 2027 Term Loans to pay down the balance on the Credit Facility by an aggregate of $60.0 million. See Note 8,9, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance at ~~September 30, 2021.~~March 31, 2022.

Acquisitions and Investments. As noted previously, the Company acquired ~~42 income~~16 properties during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 for an aggregate purchase price of ~~$158.7~~$65.5 million, as further described in Note 3, ~~“Income Property Portfolio”.~~

~~Table of Contents~~

~~Dispositions~~. During the nine months ended September 30, 2021, the Company disposed of one income property, classified as held for sale as of June 30, 2021, leased to Outback Steakhouse located in Huntersville, North Carolina, for a sales price of $3.8 million, generating a gain on sale of $0.5 million, as described in Note 3, “Income Property“Property Portfolio”.

ATM Program. During the three months ended March 31, 2022, the Company sold 314,671 shares under the 2020 ATM Program for gross proceeds of $6.2 million at a weighted average price of $19.65 per share, generating net proceeds of $6.1 million.

Capital Expenditures. ~~Expenditures.~~As of ~~September 30, 2021~~March 31, 2022, the Company had no commitments related to capital ~~expenditures.~~expenditures for the maintenance of fixed assets, such as land, buildings, and equipment.

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, proceeds from the completion of the sale of assets utilizing the reverse like-kind 1031 exchange structure, $79.8 million of availability remaining under the 2020 ATM Program, and ~~$128.5~~$60.0 million of available capacity on the existing $150.0 million Credit Facility, based on our current borrowing base of ~~income~~ properties, asand subsequent pay down of ~~September 30, 2021.~~the Credit Facility with proceeds from the exercise of the accordion options on the 2026 and 2027 Term Loans.

The Board and management consistently review the allocation of capital with the goal of providing the best long-term return for our stockholders. These reviews consider various alternatives, including increasing or decreasing regular dividends, repurchasing the Company’s securities, and retaining funds for reinvestment. Annually, the Board reviews our business plan and corporate strategies, and makes adjustments as circumstances warrant. Management’s focus is to continue our strategy of investing in net leased ~~income~~ properties by utilizing ~~the~~ capital that we ~~raised in the IPO~~raise and available borrowing capacity from the Credit Facility to increase our portfolio of income-producing properties, providing stabilized cash flows with strong risk-adjusted returns primarily in larger metropolitan areas and growth markets.

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Non-GAAP Financial Measures

Our reported results are presented in accordance with GAAP. We also disclose ~~Funds From Operations (“FFO”)~~FFO and ~~Adjusted Funds From Operations (“AFFO”)~~AFFO, both of which are non-GAAP financial measures. We believe these two non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.

FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, amortization of ~~capitalized lease incentives and~~ above- and below-market lease related intangibles, non-cash compensation, and other non-cash ~~compensation.~~income or expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies.

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Reconciliation of Non-GAAP Measures (in thousands, except share data):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
Net Income	$	1,056	$	636	$	1,913	$	930	$	924	$	511
Depreciation and Amortization		4,308		2,694		10,914		7,003		5,672		3,143
Gain on Disposition of Assets		(544)		(287)		(544)		(287)
Funds from Operations	$	4,820	$	3,043	$	12,283	$	7,646
Funds From Operations									$	6,596	$	3,654
Adjustments:
Straight-Line Rent Adjustment		(129)		(300)		(393)		(1,237)		(294)		(147)
COVID-19 Rent Repayments (Deferrals), Net		23		87		408		(538)
COVID-19 Rent Repayments										23		271
Non-Cash Compensation		79		66		231		201		79		73
Amortization of Deferred Financing Costs to Interest Expense		87		45		236		133		125		65
Amortization of Intangible Assets and Liabilities to Lease Income		(77)		(30)		(168)		(78)		(101)		(41)
Accretion of Tenant Contribution		(6)		(3)		(17)		(10)
Other Non-Cash (Income) Expense										24		(6)
Recurring Capital Expenditures		—		(1)		(41)		(34)		—		(19)
Adjusted Funds from Operations	$	4,797	$	2,907	$	12,539	$	6,083
Adjusted Funds From Operations									$	6,452	$	3,850

Weighted Average Number of Common Shares:
Basic		11,299,548		7,455,281		9,253,090		7,632,660		11,662,697		7,565,429
Diluted		12,996,503		8,679,135		10,637,934		8,856,514		13,366,191		8,789,283

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Other Data (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		March 31, 2022		March 31, 2021
FFO	$	4,820	$	3,043	$	12,283	$	7,646	$	6,596	$	3,654
FFO per Diluted Share	$	0.37	$	0.35	$	1.15	$	0.86	$	0.49	$	0.42

AFFO	$	4,797	$	2,907	$	12,539	$	6,083	$	6,452	$	3,850
AFFO per Diluted Share	$	0.37	$	0.34	$	1.18	$	0.69	$	0.48	$	0.44

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING ~~POLICIES~~ESTIMATES

~~The consolidated~~Critical accounting estimates include those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial ~~statements are prepared in conformity~~condition or results of operations. Our most significant estimate is as follows:

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by GAAP, the fair value of the real estate acquired with ~~accounting principles generally accepted in~~in-place leases is allocated to the ~~United States~~acquired tangible assets, consisting of ~~America. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates~~land, building and ~~assumptions that affect the reported amounts of~~tenant improvements, and identified intangible assets and liabilities, consisting of the ~~disclosure~~value of ~~contingent~~above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities atof an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the ~~date~~present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial ~~statements,~~condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the ~~reported amounts~~fair value allocation. The acquisitions of ~~revenues~~real estate subject to this estimate totaled 16 properties for a combined purchase price of $65.5 million for the three months ended March 31, 2022 and ~~expenses. Actual results could differ from those estimates.~~five properties for a combined purchase price of $21.9 million for the three months ended March 31, 2021.

~~Our significant accounting policies are summarized in~~See Note 2, “Summary of Significant Accounting Policies” ~~included in this Quarterly Report on Form 10-Q~~, for further discussion of the Company’s accounting estimates and more fully described in the notes to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Judgments and estimates of uncertainties are required in applying our accounting policies in many areas. During the nine months ended

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September 30, 2021, there have been no material changes to the critical accounting policies affecting the application of those accounting policies as noted in our Annual Report on Form 10-K for the year ended December 31, 2020.policies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, an evaluation, as required by Rules ~~13a-15~~13(a)-15 and ~~15d-15 under~~15(d)-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) was carried out under the supervision and with the participation of the Company’s management, including ~~our~~the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) ~~under~~of the Exchange Act). Based on that evaluation, ~~our~~the CEO and CFO have concluded that the design and operation of the Company’s disclosure controls and procedures ~~were~~are effective ~~as of September 30, 2021,~~ to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in ~~the Securities and Exchange Commission’s~~SEC rules and forms, and to provide reasonable assurance that information required

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to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including ~~our~~its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the three months ended ~~September 30, 2021,~~March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of ~~our~~ business. ~~We are~~The Company is not currently a party to any pending or threatened legal proceedings that we believe could have a material adverse effect on ~~our~~the Company’s business or financial condition.

ITEM 1A. RISK FACTORS

As of ~~September 30, 2021,~~March 31, 2022, there have been no material changes in our risk factors from those set forth under the heading Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (the “Form 10-K”). ~~However, the following risk factors expand upon and supplement those risk factors disclosed~~The risks described in the Form 10-K ~~to provide additional specificity to the matters covered by such risk factors and should be read in conjunction with the risk factors set forth in the Form 10-K. These~~ are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company.

~~Risks Related to Our Business~~

~~We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.~~

~~Our results of operations depend on our ability to lease our properties, including renewing expiring leases, leasing vacant space, re-leasing space in properties where leases are expiring, and leasing space related to new project development~~. In leasing or re-leasing our properties, we may be unable to optimize our tenant mix or execute leases on more economically favorable terms than the prior in-place lease. Our tenants may decline, or may not have the financial resources available, to renew their leases, and there can be no assurance that leases that are renewed will have terms that are as economically favorable to us as the expiring lease terms. If tenants do not renew their leases as they expire, we will have to source new tenants to lease our properties, and there can be no assurance that we will be able to find new tenants or that our properties will be re-leased at rental rates equal to or above the previous in-place lease or current average rental

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rates or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to attract new tenants. We may experience increased costs in connection with re-leasing our properties, which could materially and adversely affect us.

~~We may be unable to identify and complete~~ ~~suitable property acquisitions or developments, which may impede our growth, and our future acquisitions~~ ~~and developments~~ ~~may not yield the returns we expect.~~

~~Our ability to expand through acquisitions~~ ~~and developments~~ ~~requires us to identify and complete acquisitions~~ ~~and new property developments~~ that are consistent with our investment and growth strategy and our investment criteria and to successfully integrate newly acquired properties into our portfolio. Our Manager continually evaluates investment opportunities for us, but our ability to acquire ~~or develop new~~ ~~properties on favorable terms and successfully operate them may be constrained by the following significant risks:~~

●

~~we face competition from~~ ~~commercial developers and~~ other real estate investors with significant capital, including REITs and institutional investment funds, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices;

●

~~we face competition from other potential acquirers which may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects;~~

●

~~we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions~~ ~~and developments, including ones that we are unable to complete;~~

●

~~we may acquire properties that are not accretive to our results of operations upon acquisition, and we may be unsuccessful in managing and leasing such properties in accordance with our expectations;~~

●

~~our cash flow from an acquired~~ ~~or developed~~ ~~property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition~~ ~~or development~~ ~~of such property;~~

●

we may discover unexpected issues, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto;

●

~~we may fail to obtain financing for an acquisition~~ ~~or new property development~~ ~~on favorable terms or at all;~~

●

~~we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;~~

●

~~market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and~~

●

we may acquire properties subject to (i) liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination not revealed in Phase I environmental site assessments or otherwise through due diligence, (ii) claims by tenants, vendors or other persons dealing with the former owners of the properties, (iii) liabilities incurred in the ordinary course of business and (iv) claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

~~If any of these risks are realized, we may be materially and adversely affected.~~

~~The development of new projects and/or properties may cause us to experience unexpected costs and have other risks that could materially and adversely affect us.~~

We may develop new projects to enhance the opportunity for achieving attractive risk-adjusted returns. New project development is subject to a number of risks, including risks associated with the availability and timely receipt of zoning and other regulatory approvals, the timely completion of construction (including risks from factors beyond our control, such as weather, labor conditions or material shortages) and risks of cost overruns due to construction delays or other factors that may increase the expected costs of a project. These risks could result in substantial unanticipated delays and, under certain circumstances, provide a tenant the opportunity to delay rent commencement, reduce rent or terminate a lease. In addition, we may incur costs in connection with projects that are ultimately not pursued to completion. Any new development projects may be financed. If such financing is not available on acceptable terms, our development activities may not be pursued or may be curtailed. In addition, such activities would likely reduce the available borrowing capacity on the revolving credit facility or any other credit facilities that we may have in place in the future, which would limit our ability to use those sources of capital for the acquisition of properties and other operating needs. The risks associated with

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~~new project development activities, including but not necessarily limited to those noted above, could materially and adversely affect us.~~

The success of our activities related to new project development in which we will retain an ownership interest is partly dependent on the availability of suitable undeveloped land at acceptable prices.

Our success in developing projects that we will retain an ownership interest in is partly dependent upon the availability of undeveloped land suitable for the intended development. The availability of undeveloped land for purchase at acceptable prices depends on a number of factors outside of our control, including the risk of competitive over-bidding on land and governmental regulations that restrict the potential uses of land. If the availability of suitable land opportunities decreases, the number of development projects we may be able to undertake could be reduced. Thus, the lack of availability of suitable land opportunities could have a material adverse effect on our results of operations and growth prospects.

~~Risks Related to Other Aspects of our Operation and as a Public Company~~

~~Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unanticipated expenditures that materially and adversely affect us.~~

Our properties are and will be subject to the Americans with Disabilities Act, or the ADA. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While our tenants are and will be obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected. We could be required to expend our own funds to comply with the provisions of the ADA, which could materially and adversely affect us.

In addition, we are and will be required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and may be required to obtain approvals from various authorities with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions, ~~developments~~ or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Additionally, failure to comply with any of these requirements could result in the imposition of fines by governmental authorities or awards of damages to private litigants. While we intend to only acquire properties that we believe are currently in substantial compliance with all regulatory requirements, these requirements may change, and new requirements may be imposed which would require significant unanticipated expenditures by us and could materially and adversely affect us.

~~Risks Related to Our Financing Activities~~

~~Our growth depends on external sources of capital, including debt financings, that are outside of our control and may not be available to us on commercially reasonable terms or at all.~~

In order to maintain our qualification as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we are subject to income tax at the U.S. federal corporate income tax rate to the extent that we distribute less than 100% of our net taxable income. Because of these distribution requirements, we may not have sufficient liquidity from our operating cash flows to fund future capital needs, including any acquisition financing. Consequently, we may rely on third-party sources, including lenders, to fund our capital needs. We may not be able to obtain debt financing on favorable terms or at all. Any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on:

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●

~~general market conditions;~~

●

~~the market’s perception of our growth potential;~~

●

~~our current debt levels;~~

●

~~our current and expected future earnings;~~

●

~~our cash flow and cash distributions; and~~

●

~~the market price per share of our common stock.~~

~~If we cannot obtain capital from third-party sources, we may not be able to acquire~~ ~~or develop~~ properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to maintain our qualification as a REIT, which would materially and adversely affect us.

Our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future. As a result, we may become highly leveraged in the future, which could materially and adversely affect us.

~~We have entered into the Credit Facility and, in the future, we may incur additional indebtedness to finance future acquisitions and~~ ~~development~~, redevelopment and renovation projects and for general corporate purposes. There are no restrictions in our charter or bylaws that limit the amount or percentage of indebtedness that we may incur nor restrict the form in which our indebtedness will be incurred (including recourse or non-recourse debt or cross-collateralized debt). A substantial level of indebtedness in the future could have adverse consequences for our business and otherwise materially and adversely affect us because it could, among other things:

●

require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, capital expenditures and other general corporate purposes, including to pay dividends on our common stock as currently contemplated or necessary to satisfy the requirements for qualification as a REIT;

●

~~increase our vulnerability to general adverse economic and industry conditions and limit our flexibility in planning for, or reacting to, changes in our business and our industry;~~

●

~~limit our ability to borrow additional funds or refinance indebtedness on favorable terms or at all to expand our business or ease liquidity constraints; and~~

●

~~place us at a competitive disadvantage relative to competitors that have less indebtedness.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable

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ITEM 6. EXHIBITS

(a)

Exhibits:





Exhibit 3.1		Articles of Amendment and Restatement of Alpine Income Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 3, 2019).

Exhibit 3.2		Second Amended and Restated Bylaws of Alpine Income Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 22, 2021).

Exhibit 4.1		Specimen Common Stock Certificate of Alpine Income Property Trust, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-11/A (File No. 333-234304) filed with the Commission on October 29, 2019).

Exhibit 10.1		~~Credit~~Real Estate Purchase and Sale Agreement dated ~~as of September 30, 2021, among Alpine Income Property, OP, LP, Alpine Income Property Trust, Inc.,~~January 28, 2022. †*

Exhibit 10.2		First Amendment to the ~~other Guarantors from time~~Purchase and Sale Agreement dated March 1, 2022. †*

Exhibit 10.3		Second Amendment to ~~time parties thereto,~~ the ~~Lenders from time to time parties thereto,~~Purchase and ~~KeyBank National Association filed as Exhibit 10.1 with this Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.~~Sale Agreement dated March 15, 2022. †*

Exhibit 31.1		Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Certification filed pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

Exhibit 32.1		Certification furnished pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2		Certification furnished pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS		Inline XBRL Instance Document

Exhibit 101.SCH		Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF		Inline XBRL Taxonomy Definition Linkbase Document

Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

†	Filed Herewith

*	Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). The omitted information is not material and is the type of information that the Company customarily and actually treats as private and confidential.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ALPINE INCOME PROPERTY TRUST, INC.
	(Registrant)

~~October~~April 21, ~~2021~~2022	By:	/s/ John P. Albright
		John P. Albright President and Chief Executive Officer (Principal Executive Officer)

~~October~~April 21, ~~2021~~2022	By:	/s/ Matthew M. Partridge
		Matthew M. Partridge, Senior Vice President and Chief Financial Officer and Treasurer (Principal Financial Officer)
~~October~~April 21, ~~2021~~2022	By:	/s/ Lisa M. Vorakoun
		Lisa M. Vorakoun, Vice President and Chief Accounting Officer (Principal Accounting Officer)

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Description	Location	Date of Acquisition	Square-Feet	Purchase Price ($000's)			Remaining Lease Term at Acquisition Date (in years)
Dollar General	Cut and Shoot, TX	1/25/2021	9,096	$	1,727		14.8
Dollar General	Del Rio, TX	1/25/2021	9,219		1,403		14.0
Dollar General	Seguin, TX	1/25/2021	9,155		1,290		14.1
At Home	Canton, OH	3/09/2021	89,902		8,571		8.4
Pet Supplies Plus	Canton, OH	3/09/2021	8,400		1,135		6.6
Salon Lofts	Canton, OH	3/09/2021	4,000		694		7.0
Sportsman Warehouse	Albuquerque, NM	3/29/2021	48,974		7,100		8.4
Burlington Stores, Inc.	North Richland Hills, TX	4/23/2021	70,891		11,528		7.8
Academy Sports	Florence, SC	6/22/2021	58,410		7,650		7.7
Big Lots	Durant, OK	6/25/2021	36,794		1,836		5.5
Orscheln	Durant, OK	6/25/2021	37,965		2,017		1.7
Lowe's	Katy, TX	6/30/2021	131,644		14,672		11.1
Harris Teeter	Charlotte, NC	6/30/2021	45,089		8,273		6.8
Rite Aid	Renton, WA	6/30/2021	16,280		7,200		5.1
Walgreens	Clermont, FL	6/30/2021	13,650		5,085		7.2
Big Lots	Germantown, MD	6/30/2021	25,589		4,670		9.6
Big Lots	Phoenix, AZ	6/30/2021	34,512		4,599		9.6
Circle K	Indianapolis, IN	6/30/2021	4,283		2,800	⁽¹⁾	3.4
Burger King	Plymouth, NC	6/30/2021	3,142		1,736	⁽¹⁾	6.8
Dollar Tree	Demopolis, AL	6/30/2021	10,159		1,615	⁽¹⁾	8.7
Firestone	Pittsburgh, PA	6/30/2021	10,629		1,468	⁽¹⁾	7.8
Advance Auto Parts	Ware, MA	6/30/2021	6,889		1,396	⁽¹⁾	3.6
Grease Monkey	Stockbridge, GA	6/30/2021	1,846		1,318	⁽¹⁾	12.3
Hardee's	Boaz, AL	6/30/2021	3,542		1,185	⁽¹⁾	9.4
Schlotzsky's	Sweetwater, TX	6/30/2021	2,431		1,147	⁽¹⁾	14.0
Advance Auto Parts	Athens, GA	6/30/2021	6,871		1,127	⁽¹⁾	3.6
Family Dollar	Burlington, NC	7/01/2021	11,394		1,618		9.8
O'Reilly Auto Parts	Duluth, MN	7/12/2021	11,182		1,030	⁽¹⁾	6.4
Tractor Supply	Washington Court House, OH	8/27/2021	39,984		2,370		10.8
Harbor Freight	Midland, MI	8/31/2021	14,624		1,750		4.8
Camping World	Duluth, MN	9/14/2021	66,033		10,451		12.3
Advance Auto Parts	Ludington, MI	9/14/2021	6,604		1,050		10.3
Advance Auto Parts	New Baltimore, MI	9/14/2021	6,784		1,050		10.3
Dollar Tree	Stillwell, OK	9/17/2021	9,828		1,576		10.5
O'Reilly Auto Parts	Angels Camp, CA	9/22/2021	7,066		2,125		4.5
Walmart	Hempstead, TX	9/28/2021	52,190		4,450		5.3
7-Eleven	Olathe, KS	9/30/2021	4,146		3,782		5.7
At Home	Turnersville, NJ	9/30/2021	89,460		7,181		8.1
Boston Market	Turnersville, NJ	9/30/2021	2,627		1,027		8.3
Verizon	Turnersville, NJ	9/30/2021	6,027		3,568		5.8
Advance Auto Parts	St. Paul, MN	9/30/2021	7,201		2,305		7.1
Hobby Lobby	Aberdeen, SD	9/30/2021	49,034		3,150		3.4
Dollar Tree	Albuquerque, NM	9/30/2021	10,023		1,081		9.4
Office Depot	Albuquerque, NM	9/30/2021	30,346		3,814		2.3
Valero ⁽²⁾	Jackson, MS	9/30/2021	1,920		1,067		20.0
Valero ⁽²⁾	Leland, MS	9/30/2021	3,375		977		20.0
	Total / Weighted Average		1,129,210	$	158,664		8.1


Type	Description	Location	Rentable Square Feet		Remaining Term (Years)	Contractual Rent Escalations	Annualized Base Rent ($000's) ⁽¹⁾
Office	Wells Fargo	Portland, OR	212,363		4.3	No	$	3,137
Office	Hilton Grand Vacations	Orlando, FL	102,019		5.2	Yes		1,825
Retail	Walmart	Howell, MI	214,172		5.3	No		1,369
Retail	LA Fitness	Brandon, FL	45,000		10.6	Yes		958
Retail	Lowe's	Katy, TX	131,644		10.8	No		917
Retail	Burlington Stores, Inc.	North Richland Hills, TX	70,891		7.3	Yes		859
Retail	Kohl's	Glendale, AZ	87,875		8.3	Yes		844
Retail	Hobby Lobby	Tulsa, OK	84,180		9.3	Yes		842
Retail	At Home	Canton, OH	89,902		7.8	Yes		801
Retail	Harris Teeter	Charlotte, NC	45,089		6.6	Yes		768
Retail	At Home	Raleigh, NC	116,334		11.0	Yes		732
Retail	Container Store	Phoenix, AZ	23,329		8.4	Yes		726
Retail	Camping World	Duluth, MN	66,033		12.3	Yes		705
Retail	Cinemark	Reno, NV	52,474		3.0	Yes		695
Office	Hilton Grand Vacations	Orlando, FL	31,895		5.2	Yes		684
Retail	At Home	Turnersville, NJ	89,460		8.1	Yes		641
Retail	Live Nation Entertainment, Inc.	East Troy, WI	—	⁽²⁾	11.5	Yes		634
Retail	Academy Sports	Florence, SC	58,410		7.6	Yes		628
Retail	Sportsman Warehouse	Albuquerque, NM	48,974		7.9	Yes		573
Retail	Hobby Lobby	Winston-Salem, NC	55,000		8.5	Yes		562
Retail	Rite Aid	Renton, WA	16,280		4.8	Yes		558
Retail	Hobby Lobby	Arden, NC	55,000		9.9	Yes		546
Retail	American Multi-Cinema, Inc.	Tyngsborough, MA	39,474		11.5	Yes		507
Retail	Dick's Sporting Goods	McDonough, GA	46,315		2.3	No		473
Retail	Jo-Ann Fabric	Saugus, MA	22,500		7.3	Yes		468
Retail	Conn's HomePlus	Hurst, TX	37,957		9.9	Yes		452
Retail	Old Time Pottery	Orange Park, FL	84,180		8.8	Yes		439
Retail	7-Eleven	Austin, TX	6,400		13.5	Yes		377
Retail	Walgreens	Birmingham, AL	14,516		7.5	No		364
Retail	Walgreens	Alpharetta, GA	15,120		4.1	No		363
Retail	Best Buy	McDonough, GA	30,038		4.5	Yes		338
Retail	Big Lots	Germantown, MD	25,589		9.3	Yes		334
Retail	Big Lots	Phoenix, AZ	34,512		9.3	Yes		329
Retail	Lehigh Gas Wholesale Services, Inc.	Highland Heights, KY	2,578		9.2	Yes		329
Retail	Walgreens	Clermont, FL	13,650		7.5	No		328
Retail	Verizon	Turnersville, NJ	6,027		5.8	Yes		326
Retail	Office Depot	Albuquerque, NM	30,346		2.3	Yes		300
Retail	7-Eleven	Georgetown, TX	7,726		14.3	Yes		276
Retail	Walgreens	Tacoma, WA	14,125		8.8	No		259
Retail	Walgreens	Albany, GA	14,770		11.3	No		258
Retail	Walmart	Hempstead, TX	52,190		5.3	Yes		253
Retail	Hobby Lobby	Aberdeen, SD	49,034		3.4	Yes		221
Retail	7-Eleven ⁽³⁾	Olathe, KS	4,146		5.8	Yes		219
Retail	Circle K	Indianapolis, IN	4,283		3.2	Yes		210
Retail	Scrubbles Car Wash ⁽³⁾	Jacksonville, FL	4,512		16.1	Yes		189
Retail	Cheddar's⁽³⁾	Jacksonville, FL	8,146		6.0	Yes		186
Retail	Family Dollar	Lynn, MA	9,228		2.5	Yes		160
Retail	Orscheln	Durant, OK	37,965		1.4	Yes		160
Retail	Advance Auto Parts	St. Paul, MN	7,201		7.1	Yes		150
Retail	Tractor Supply	Washington Court House, OH	39,984		10.8	Yes		149
Retail	Advanced Auto Parts	Severn, MD	6,876		13.4	Yes		148
Retail	Big Lots	Durant, OK	36,794		5.3	Yes		142
Retail	O'Reilly Auto Parts	Angels Camp, CA	7,066		4.5	Yes		128
Retail	Dollar General	Kermit, TX	10,920		13.9	Yes		126
Retail	Burger King	Plymouth, NC	3,142		6.6	Yes		125
Retail	Harbor Freight	Midland, MI	14,624		4.8	Yes		124
Retail	Dollar General	Chazy, NY	9,277		10.0	Yes		119
Retail	Dollar General	Odessa, TX	9,127		13.8	Yes		117
Retail	Dollar General	Willis, TX	9,138		13.8	Yes		115
Retail	Dollar General	Winthrop, NY	9,167		9.9	Yes		113
Retail	Family Dollar	Burlington, NC	11,394		9.5	Yes		113
Retail	Advance Auto Parts	Ware, MA	6,889		3.3	Yes		112
Retail	Dollar General	Cut and Shoot, TX	9,096		14.1	Yes		112
Retail	Dollar General	Milford, ME	9,128		12.1	Yes		110
Retail	Dollar Tree	Demopolis, AL	10,159		8.3	Yes		110
Retail	Pet Supplies Plus	Canton, OH	8,400		6.1	Yes		110

Three Months Ended

March 31, 2022

March 31, 2021

Stock Compensation Expense – Director Restricted Stock

Stock Compensation Expense – Director Retainers Paid in Stock

Total Stock Compensation Expense