PINE - Earnings call transcript Q3 2021 | Alpine Income Property Trust, Inc.

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Operator

Good morning, everyone and welcome to the Alpine Income Property Trust Third Quarter 2021 Earnings Conference Call. [Operator Instructions] At this time, I’d like to turn the conference call over to John Albright, President and CEO. Sir, please go ahead.

John Albright

Good morning, everyone and thank you for joining us today for the Alpine Income Property Trust third quarter 2021 operating results conference call. With me is Matt Partridge, our Chief Financial Officer.

turn regarding to today’s I’ll the to begin, disclosures customary call. we it Matt over provide Before Matt?

Matt Partridge

expectations materially Thanks, results John. under these to time-to-time I’d differ forward-looking XX-Q alpinereit.com. the other over of now will that The our statements can from like risks from contain actual statements. significantly to to company’s non-GAAP measures remind Form in call SEC to the today company’s cause you undertake discussed reconciliations John. could turn in disclosed considered greater Factors everyone from are detail and which financial the and forward-looking in reports we results are we update in statements future and earnings federal that, differ SEC XX-K, matters and find back law. at use With I comments securities actual release, of website may our that these many on duty no Form our filings our

John Albright

Matt. and Thanks, attractive the solid in as execution several opportunities acquisition number of market found quarter a progress initiatives. we of on notable was made This another

at Florida. well-known us in our investment We continued to acquiring activities lease store entered million going am of existing new a loan new fund term national quarter, properties rate at the into X.XX%, during our our fixed pace I we of net give closed average of banking a high-quality with excited in existing and Jacksonville, new undeveloped on acquisition a and an weighted develop rate lease X.X%. liquidity $XX additional million that And with the grocer development properties parcel cap relationships of We $XX.X store of a announce consistent one on to for balance with to initial XXXX to XXXX. a

operating once are quarter in well-located by high-quality again activities focused fundamentals brands that properties national acquisition sectors. occupied real strong were estate in on well-performing the retail Our exhibit

During to we XX spread acquired across are states, properties portfolio. new XX our quarter, different which the X of

Our made At to XX Auto Dollar in our Dollar. high-performing operating Hobby such new Tree Walmart, X-Eleven, XX Lobby, in effort existing exposure concerted tenants Advanced and to we acquisitions Parts, as increase Home, tenants our and include sectors Family portfolio a

We and and include excellent quality of World. notable at added rate diversity leased XX also cap a $XXX high Freight, have Year-to-date, which O’Reilly of tenants, Harbor going average remaining X Camping think nearly lease at number term for as Auto such quality in credit Tractor we of net a Parts, properties Supply X.X% and brands acquired Valero, we add and weighted weighted average million a years. acquisition tenant

XXX% and quarter end of portfolio X.X of properties the the Our totaling and in sectors continues XX tame be of to properties within XX occupied with the as XX XXX% square million feet be to operating continue states. consisted tenants

tenants Grand General, Fargo, Walgreens. top Dollar At Lobby, Hobby Home, Our Wells and Vacations, include Walmart Hilton

the have As the increase our properties beginning number geographic doubled exposures. the number of able tenants, sector meaningfully have portfolio. portfolio, since of year, in diversity the tenants nearly and we And the drawn we of have the we been and to of

to a our XX% diversified now execute disposition which have point grow we longer continue tenant are and XX%. sector above we to of plans portfolio. exposures a have trends on Both as the that overall We our no exposure below and expect largest we

to company focused. of our disposition work position Speaking office the towards retail properties XXX% to our of as continue the we efforts, sale

process Wells We parties discussions of under Hillsboro, to are the are in sell we in the property interested contract sell and Hilton currently to Oregon. properties Vacations Fargo the with Grand

regarding of we also a weighted given will disposition call disposition point expect average the do anticipate X.X sale our with that proceeds. investment properties sector Carolina remaining portfolio X.X in our performance years. of to these reference to the quality tenant portfolio. earnings, over to partially of now I lease we the and of the grade the as be approximately exposure rated following exit new office as replacing combined geographic increased I similar term our the Matt quarter a and properties sell believe metrics Steakhouse term the guidance. Huntersville, retail of in to the dilutive credit which and quarter, have that North by our these properties talk diversity of we for With we to While Increased redeployment exposures rate, about markets tenants weighted our lease in we did in better number average locations cap will during activities highlight Outback third the that, turn capital will

Matt Partridge

CTO percentage fee XX% more the basis John. revenues quarter Thanks, of expenses a and compared the XXX Realty of third of third Total the over XXXX for our continuing quarter of include management XXXX which administrative points more improving basis when external of by than second managers revenues, XXXX by compared to growth when third $X.X than XXX the as quarter quarter the million. increased General decreased organizational and points to scale. XXXX our to of year-over-year

per $X.XX XXXX, funds respectively XXXX. X.X% and million of quarter or those when compared the quarter from per For X.X% third FFO in growth operations funds of adjusted of from operations and were the and to AFFO share XXXX quarter share. $X.X third were the third

occur through and second the second these share when the $X.XX AFFO growth representing the of was share, payments to year-over-year XXXX. rent of share scheduled the respectively under was tenant first per XX% COVID-XX previously of making deferral to and by impacted FFO $X.XX are was pandemic to agreed one We repayments related Year-to-date compared agreements. Our related quarter months XX% and agreement positively AFFO per per X XXXX. to in have only $XX,XXX of a disclosed from rent repayment the approximately deferral to the rent quarter previously deferred

XXXX, represents ratio and payout per a of of paid third of dividend $X.XXX annualized X.X%. AFFO stockholders XX% company cash per the of on quarterly quarter approximately September the share and per share XX FFO share a September For of X. an yield to on record of This

dividends quarter fourth IPO our third company late the marks increase the increase the $X.XXX quarter of the XXXX and of in stock common a our XX% end paid anticipate its dividend. second year-to-date consecutive November. the over through We These represent our fifth payout of quarterly XXXX, dividend than cash per per quarter AFFO cash towards XX% in ratio increase quarters cash since announcing share in by dividend FFO share. Year-to-date three share a of per company Our has dividends. more XXXX, quarterly fourth the dividend first for of X%

remarks, to balance his of million loan and revolving John credit three reduce new at on As outstanding banking beginning maturity X.XX%, we unsecured term in completed which new September XX the extend at we referenced of partners. $XX bring rate the a of interest use profile, an prepared facility, initial debt our our

at first term rate. million lock loan term with to access As XXXX. in the term of to unsecured in earlier have $XXX new attractive of year, the in loan X than and some term our date discussed has term debt $XX acquisitions, longer We the expected January in from this capital the our helps loan more than sales an to office broaden years more The addition cash is earlier. million from with future a proceeds liquidity revolver and now property maturity which capacity undrawn new

during not program on the third Given we company, our ATM and prospective equity were current the active liquidity of the quarter.

of out our as restricted the same However, EBITDA as OP positioned of share quarter XXXX, XX-property was units. prepare X.Xx. XX%, and cash previously and sheet additional XXX,XXX announced, to was we units completed net to increase as quarter end acquire OP our at Net and the to debt guidance. performance issued was operating inaugural XXXX part specific unit other consideration did we and and and transaction forma did the per one support property year issue XXXX total execute total full our was markets per remaining value quarter, million of OP of the an a September approximately acquisition value $XX.XX assumptions capital unit our as was we fourth pro activities, cash approximately XX,XXX our that $XXX.X and future third portfolio. share well our we million. Total enterprise The be activities. AFFO to issuance In $X.X debt end Heading XX on pipeline close while was continues towards our to and debt balance for diversified FFO at OP previously

I is back for $X.XX want the call share FFO over relationships $X.XX now now and and per the to share. year thank With continued closing diluted John I’ll business that, to guidance support. partners $X.XX his remarks. shareholders, our of is the our turn For other And XXXX, to guidance $X.XX banking for diluted to per full AFFO

John Albright

Matt. Thanks,

We company away our have our a made X in high-quality that progress a delivered of excited anniversary during built I X-year dividend time. first consistent We years. as short are these public we grown relatively a and about from month about portfolio, the execution, am period meaningfully

open work our further of for a we up for it At shareholders. for time, While able continue questions. you investment drive execute to we of will time support. all am strategy be value have ahead we will and I us, this our lot Thank confident disciplined Operator? your and to

Operator

first Instructions] [Operator go Janney. with from Rob from your ahead comes question. today question Our Stevenson Please

Rob Stevenson

guys. timing contract? we first end thinking both under sort of the quarter assets or these to morning good are the fourth sale likely the is drift that John, likely the should how of into of that Hi, to is, the be given it’s quarter? Hilton of Is about office

John Albright

thanks, Rob. so Yes,

could scheduled be be of into under year. different more little is contract complicated, there the end that, So, next to Fargo terms. because Wells part definitely one is the before year kind the year Wells bit sectors. be would in potential Hilton close but of a the could first redevelopment will of be

redevelopment in And so side. really the digging are people on

redevelopment about lease, So, at is property the fairly everyone it’s and the everything but looking is – easy the potential.

Rob Stevenson

or like that tail then on basically that, guidance? your material I going So like, you that, the dilution What same the fourth thing, some early up doesn’t is of in December, guess your fourth guidance? is are that Hilton on closes? given being assuming that the quarter that Matt, wind that I have into of factored here really Okay. how that any there to Is mean, sort impact And quarter? end mean

Matt Partridge

Yes.

late the contemplates early guidance December Our close. November

Rob Stevenson

Okay.

Matt Partridge

about out we’ll it. So, of cash flow X off of X get months of the

Rob Stevenson

you the that cash are assuming flow going almost to of off Wells? basically, get then all And of

Matt Partridge

Correct.

Rob Stevenson

Okay.

XX top pipeline there exposures any like that at whether pipeline, are that? goes that? then looking minimis immediately In X% anything the jump you X%, into that today, are your anyone up at meaningful terms or And acquisition that or of to or is big tenant how in exposure de from would XX%

Matt Partridge

strong. The because There of No. is as crunch fairly to about of on closings because lumpy whole for industry, is pipeline. fear there – pipeline nothing industry, federal the want government there be estate yearend XXXX And we in out taxes. real know, the the a the you is

And so into of that’s the volume end causing an the amount of transaction cramming incredible year.

that as same. – it in as So there more, nothing just seeing as as the we as no credits and have of kind front is diversify of we are abnormal been what of and add trying will far can. about But to kind more the of new get composition much be we you wave

Rob Stevenson

Okay.

gone in of would jump about around at So thinking roughly be correctly? Home I are X.X% assuming be annualized tenants Hobby top your am rent, Lobby and that then two to that somewhere X%, and Wells probably At off end, that base year that at Hilton would

Matt Partridge

so I if that we won’t if we mean, jumped be kind fairly right because we I small, easy. added things to as move else just another around of are but those up, surprised on stand now, something credit

Rob Stevenson

have there, And forward X%, office ratios, $X.XXX dividend higher Okay. the on X the about the been increase how the words, me, should for last In that the that have sale thinking temporary delusion going by a of the one be the you sort assets then this delusion is is increase. if influence given you likely where payout sales how to pending dividend things guys we going office Board are increase would thinking you today percentage dividend? from and of increased other weren’t the much or basis, John, a on the or and did

John Albright

Yes.

it the moving up. not buildings think can anything low – think way go I given our course And that the would about I it ratio, But natural from you that’s see payout that it up. office will of dramatic pressure incrementally to have side. be change

Rob Stevenson

you, Okay. Thank guys.

John Albright

Thank you.

Operator

with from Wes your comes go question. Our ahead next Baird. from Please question Golladay

Wes Golladay

Hi, [ph] talk when development time if doing portfolio other you there related is the opportunities about any good are guys. the particular in old is you quarter morning to Can this pottery? and personal this

John Albright

pottery. is I more portfolio the It to because that’s to became in a old bankruptcy, am and opportunities went on look, during engaged one Yes. related sure went really – other little we And of brokers kind old asset particular of time that is there of pottery bit that COVID time outcome. kind thinking and that the forward when and

right else our now, are we redevelopment analysis pain not obviously there in everything any is that kind portfolio given So, doing is of now.

– estate is in and mean we our but that’s buying am not there love how future, now. has right one So, large store on come when that real really parcels are it been that I where sure the opportunities. there is optionality good we have are focus other there I

Wes Golladay

you at maybe out it. And is that parcel asset? Wells an potential existing Got then redeveloping when look the redevelopment, Was Fargo that that development?

John Albright

No, entire the it be site. would

a market. COVID, with into leaving especially everyone it’s coming very this large strong site Hillsborough. So, Hillsborough market, in is Portland

plant. have You Fab the with X Intel

Nike’s headquarters. have You

not you data of now. one from the side, residential power is the center intensive markets from is but right supply very Other the data only side, is there supply in mean power seeing markets, I the centers. limited. data So, that center multifamily world Hillsborough are

of kinds So, you of are uses all different seeing potential.

Wes Golladay

year. calibrate Got we next our for to trying And are models it.

us You two, should mean the help the total? blend way disclose can one think rate in with that. I of if modeling you we about the we you be cap for under on office may rate expected any for assets dispositions contract how were the But office? the to So, cap can’t

John Albright

whatever. kind the a that we thing cap low, have lot talked a of it. are with are or this rates It’s the one from cash about of Xs, think mid-high it’s coming somewhat of we is we how little even process in mid, It to when the or, and started kind property kind depends, retaining the of consistent but about the longer whether flow

good say I measure of would basically kind that kind properties. mid-Xs would So, be to be think would the a about of

Wes Golladay

Got a guys. it. Thanks lot,

Operator

ahead with question comes your Please RJ James. Milligan next question. Our from from Raymond go

RJ Milligan

Hey, good morning, guys.

and has in have as compression quarter. am stick hearing what been of for I more down across that are expect wondering before ‘XX. normal been end sellers fourth you bit we historically this the get into And rates of in in the market So, in us little cap could fourth a to if to just look sector. as the do Obviously, broadly expectations we seeing done rush then the seen the you there sort that the just we give then activity quarter the update transactions quarter, an year? look as have you

John Albright

Yes.

these of definitely acquisitions. there a mean capital pursuing lot I So, is

assume by portfolio we would obviously an lower North demonstrated buyer now rates that selling a can cap $X.X cap. would that We here million a at in mean of you So, $X.X cap. at the million that by have the never as that’s somewhat. That have Carolina more been Outback been

able locations, to So, we pleasantly focus good also find sell without the like say good up are that the surprised rate certain we that. we quality But are too side. much are to we tenants, I where seeing as that would property opportunities, cap on quality opportunity giving

this wouldn’t just what are last wouldn’t are the So, down after blended rates cap move not – to I fourth say say – I to. we you from the going that quarter,

question condition by you really side, think reports. the to title too volume getting your acquisition somewhat think something closing environmental property we I seller of end of survey, consistent. are companies the it’s of a have late amount given to just on if And are I I of infrastructure think year, the seeing assets, the almost a on

that to see to going the into industry are are lot you an things quarter, observation. just of as first think I So, move a going

RJ Milligan

$XXX I And – there you of be replicated concerns you then cap can’t next – for there or give second can quarter year? compression, volumes and is $XXX think the of then think that from same you of big but there just may the so to any reason know why – and Is am doing which Is the this anything that was prevent I are I put about the that rate there over or already for in acquisitions, were this what year, guidance, ‘XX? not just year, components a million may million should obviously to year. close year trying

John Albright

next I about think year. bullish we are pretty

I on more New a the we bit I volume And think will or probably next for not same able relax be will to after confident competition the Year. pretty the do year. pressure the am

RJ Milligan

last question Matt you ‘XX? just how can is the expect the on get as into fourth ending My X.Xx, Okay. talk trend we for quarter levels you leverage and to that about quarter at

Matt Partridge

have fixed we Yes. rate net saying been to perspective. you run are noted, we Xx. EBITDA mean run it’s Xx coverage to as from obviously, to The leverage that comfortable a pretty consistent which charge debt on ratio the Xx, about level closer a in We we at X.Xx at. ended long I over be want

as So, and really capital and talked from there it, we we pressure down. have is around a as will it raise no up flow lever leverage And bring about cash perspective. back move

RJ Milligan

guys. Thanks great. Okay,

John Albright

you. Thank

Operator

Please ahead And from question your go with question. Michael next from comes Gorman BTIG. our

Michael Gorman

seeing talk, being some more comfortable lease than shorter any Good been is markets, I more morning, there of I shorter the shifts be duration wondering at in are some coming questions where Is the But that there some resets I opportunities that. taking inflation mentioned you and type am duration, of acquisition type… you if the past, lease competition, with that or competition may about seeing in in talk Thanks. Yes. the was answered. rather just product if could think you with John, some if my guys. A have in lot of end wondering just later. sooner that there property have

John Albright

is There kind sweet inflation to is all mean competition pressures. want more the be spot to definitely you there. Yes. and those I of where with me that definitely

all have have to And want you opportunity up to don’t have industry. seeing an been to this kind You of we real for the tenants – estate come want renewal. that across

you basis we replicated. know these over guys buying rates been tenants can’t the get have well And have that be good properties can’t you years As able very basically fairly for the to the build a rental that deal on them. the been had

stickiness to I factors think construction the the and properties, of is So, just enhanced. the the tenants costs labor inflation with and more

that with the lot buyers is And duration just and spot. maybe a are the definitely compete They the still leverage. So, with leverage. because of efficient they need because really mom can’t shorter still pop sweet

bit a not not so it’s a is But are good still – – there it’s competition. we there yes, not – opportunity. So, a like more little

Michael Gorman

sort and of pressures did out in approach of opportunity tenants. underwriting Jacksonville type think in structured with we then maybe the think the the some to you in this of when environment? when has to terms How in you suit have that building about And inflation contracts great. laying about terms it heard shortages Okay, of vein, we how a similar maybe of that about, build the

John Albright

Yes.

costs line, structure and forth, of max in that deal. we don’t is get the get guaranteed out if So, so can such the building the that, we

is protection So, there there.

making the wouldn’t sort down. and of we to ourselves nailed lease that cost So, isn’t some equation delivery certainly sure without bind

Michael Gorman

cap to to approach asset structure increasing through the quarters. and the then from capital redeploy next one as obviously markets volume? with also of the sheet And come balance of great. balance you asset daily sales? think and the coming that in do sales, average the How obviously, equity increasing the couple and side, Matt, into these need that last your the the you markets with mentioned me. just about taping coming you a over How should the lot Okay, we for on benefits market the equity equity ancillary the funds the just go in

Matt Partridge

in and mean flow. create grow the to want I shareholders more Yes. obviously for equity general, we more liquidity cap the and market

think to want everybody that. I with We would be opportunistic stock. to like see

sure shareholders capital of trying making are to out the increasing sensitive in stock. good steward that still very the new shareholders, are demand for We balance to we bringing a and for existing while

be try we there. strike on of So, which pretty to to Obviously, capital markets equity a basis. we the terms have funding in ATM, match accessing those a balance helps efficient us

So, say on the in But balance generally are be it. side. that’s how we think going to try I and – to equity we constituencies opportunistic would try the equities about to both

Michael Gorman

Okay, great. guys. Thanks

John Albright

you. Thank

Operator

question. from go comes question next Our from Craig Please with Riley B. Kucera Securities. ahead your

Craig Kucera

of morning, to guys. Can talk are category perspective? from so? Thanks. the about risk months are that and best seeing six Good you next adjusted you you pipeline evaluating returns about talk where Yes. a Want or sort the the

John Albright

now returns I of a category, say shorter real good renewing we that mind I of we where that kind even really sort are risk That mean that wouldn’t it’s situation. little that that un-favored locations. on strong category. good tenant estate bought is based think very a have It’s are – we picking adjusted duration, would not of question. I bit we seeing a really

of bit So, return. we one risk little a are seeing opportunities I would say, adjusted to harder just category, it’s better return in say kind

whether getting But tenants think the it’s very well. for that is shorter Seeing to early. you be driving us. very, just like I the lease sure and real seem are really good and doing estate duration making opportunity all

estate kind isn’t there to scenario. certainly be out time is the old like a was category it’s of the only so well. that doing really pottery involved We get real would And

Craig Kucera

tenant little is couple maybe of little non-investment guess more looking more real when Got grade of leaves a a and that years? economy bit and maybe a are buying bit maybe less versus the a after estate a up become for happy investment then if does concept the I for and it. strengthening paying important you

John Albright

fairly in composition. investment ratio because the will keep of important it be grade to involved it’s that side We decent, for still portfolio

Craig Kucera

us more Jacksonville, find Okay, metrics or perspective be from to maybe the fair some meaningful going cash flow constructed? you can around back for And just investment set me, that of how some an give enough. one thoughts one development or in to might properties

Matt Partridge

Matt. have mean it’s XX,XXX we square about building. a I disclosed is this that foot Craig, Hey,

And so a grocer. it’s it’s grocery – a

So, of you are can throw on overall development and And the that and a an per then there us kind targeting number some would because square to trade to risk. expect you we triangulate market foot in should be I above taking beyond value. where would obviously, say sort the of spread it

So, this bill. run-rate should get to earnings basis a be we accretive overall once pretty a on

Craig Kucera

I it. Okay, Thanks. appreciate

John Albright

you. Thank

Matt Partridge

Thanks.

Operator

this am remarks. back time [Operator at management would questions. to the like additional Instructions] over Ladies floor for to team and gentlemen, turn I the closing showing any no I

John Albright

you look joining us. Thank you to for quarter. to forward talking I during the

Operator

you And joining. we conference conclude ladies Thank and gentlemen, today’s call. will what for that

lines. disconnect now may your You

Alpine Income Property Trust (PINE) 22 Oct 212021 Q3 Earnings call transcript