PINE - Earnings call transcript Q1 2022 | Alpine Income Property Trust, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Alpine Income Property Trust First Quarter 2022 Earnings Call. [Operator Instructions] Please be advised today’s conference maybe recorded. I'd now like to hand the conference over to your host today, Matt Partridge, Senior Vice President, Chief Financial Officer and Treasurer. Please go ahead.

Matt Partridge

everyone. morning, Good for Property you call. today the for And first joining quarter Income Trust conference XXXX Alpine thank us operating results With CEO Albright. me our John today John Thanks, and President, is

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

in of contain release to on back reports our John. I we With use call You earnings non-GAAP website measures now can reconciliations at alpinereit.com. will over our that, our which financial the find turn SEC

John Albright

Thanks, Matt. morning, everyone. And good

had first exchange years pharmacy positions occupied now pharmacy, office quarter the year investment the We more anticipation portfolio, more improving was yields diversity nine the million, to total, average have to of in where X.X%. of retail our our sectors. which we our The lease properties to concentrated portfolio with with maintain largest purchased Walgreens remaining had acquisition the in cap office stores, over were selling and last allowed to our portfolio, CVS throughout sale. tenant. property rate This Fargo tenants we XX grocery, located the we retail of a volume Walgreens the Oregon. of property, rate, of shift especially auto weighted in And sale, states store XX and strategic parts, our remaining operate the and is for quarter while as a and during The XXXX exposure, In the reverse and us bulk Hillsboro, in also office $XX weighted doubling a a our of level, completes Wells acquired included and first in property via term newly are the XXX% acquisition property. just XX convenience acquiring term recently lease credit properties a the XXXX saw most year. sole sell an losing to geographic eventful start acquire which consistent the than average cap seven different With initial normalized dollar more expect returned grade X.X% nine

we're to expansion, Although acceleration to to with rates, look year-to-date interest see incremental add hopeful for prudently we opportunities rate pipeline. we'll our start as cap

Along two York, at at of people. lines, the assets we're add per and able attractive that to In these the coming With markets, locations square valuations rents to that X of than terms we million well population larger traffic from markets to DC from Philadelphia, in foot sit continue thirds infill corner benefit Baltimore, heart Washington exposure intersections. to New more acquired barriers entry. higher and of with QX our MSAs density favor than more

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

exposure our pharmacy end sector. the tenant pleased the grade to is credit and say reached of at exposure, pharmacy XX% of With the Walgreens quarter. now our our acquisition investment most Walgreens, coming our largest the and specifically, from portfolios majority volume is QX largest I'm

Lowe's. our Lobby, of Obviously, General, list top Following At to office office Houston tenant Wells more the earlier Walmart month, and ground change Walgreens, the in Hilton this property tenants office largest Hobby of quarter Pharmacy our gains, Dollar removal than reverse with into million Academy CVS of $XX and combined Fargo, and the when dispositions today, sales the first sale our portfolio which the top portfolio. our include fourth generated quarter our lease Sports, property Walgreens the exchange in Home,

our overall portfolios By confident incrementally our to call improve can over we're yields, our properties, proceeds disposition our improve that to And portfolio increased as guidance compare I'll higher valuation anticipate And cap on first peers. share. to easily our revised net gains at the we've about X.X% changes sell portfolio to portfolio metrics overall and can our implied we sheet. are strong able quality balance we and drive and comparable, turn look book net now over will being they generate cash rate, our given for the and sheet, rates low which to delever further be more will quarter program our investment Matt will investment where to selling lease recent capital able intrinsic profile that our redeploy credits, investors. we higher activities cap hopeful value. We FFO our disposition we're buying optimistic balance that, With highlight performance, into because XXXX guidance. stronger Furthermore, we our an and largest spreads markets to our just trading in assets, talk for as drive we're community better per now

Matt Partridge

results. QX right Jumping John. into Thanks

per First or share, a was increase quarter share, $X.XX XXXX. the quarter $X.XX XXXX per compared first FFO of XX.X% to

per net very rent full share, $XX,XXX quarter that rents. last in increase quarter of or recovery XXXX. totaled of per $XXX,XXX say deferred the is the XXXX, the quarter pleased $XXX,XXX $X.XX AFFO variance quarter to over X.X% will year-over-year first the quarter COVID COVID our most notable between $X.XX of completion all marking in be repayments first just next of and a previously and of of XXXX repayments, XXXX. quarter scheduled our of the non-recurring I'm deferral FFO and share, The was rent AFFO first performance the First deferral

the have to things, a or of quarter operating seen largely occupied. corporate tenant in of performance we've first remains strong the the across our all side sectors. consistent corporate portfolio maintain year, through XXX% our demonstrated tenants the On of of ability level as trends, improvement nearly our operating performance And continued monitored we

and is revenue quarter, organizational and the of scale increases expenses by million. offset manager past quarter in totaled decrease our was in positively was year-over-year XX%. a our for the G&A management fees external quarters which nearly which from more to largely general XXXX our $X.X and $XXX,XXX continues highlighted percentage in increase includes of improving This administrative by year as activities, a than management a the points, to our markets Our XX%, efficiency. driven was XX.X%, fee equity reflect revenues capital XXX as to basis first over growth of

paid its company yield the approximately dividend XX.X% representing per dividend. current quarter year-over-year a of For cash of cash a first increase over the annualized share, XXXX XXXX. And of $X.XX company's The QX first second regular AFFO respectively. end very quarterly X.X%. healthy for towards quarter of ratios cash and XX% dividend FFO and May. payout XX%, anticipate announcing the at quarter were the our And we

markets facility. share. quarter $XX very sale, exercise of cash of EBITDA long-term average which with the debt million quarter during quarter credit before to in disposition healthy credit net million We to Subsequent XXXX end, facility, our our the and in guidance accordion acquisition number capital line with this front, first XXXX for revolving asset closing million issued program issuance Wells ratio full overall interest place additional lower down backdrop, number unsecured net proceeds down revolver. of on capacity straight $XX.X potential annualized revisions and well X.X with $X.X $XXX proceeds to of charge we the began of other rent, net account to annualized coverage cash a X.Xx. expectations we rates Fargo value the our near also our capital stock We is of XXXX increased of term the on in in weighted second used fixed options of count increased year and of our a proceeds. available of total the total In to and through the term liquidity pro year, increase for the place and $XX.X unsecured share approximately $XX.XX pay When the or for wide consideration price ATM an revolving pay guidance performance forma as to rent borrowing during markets from as common and the a These of On per for and our occurred QX of we Wells used enterprise portfolio base sale times increasing loans, XXX,XXX the XX%, million, did on were an proceeds average ended debt our influential that second assumptions. million shares current base through quarter. were combined quarter we to Fargo

full range share balance Our compared guidance of from activities our year is with guidance XXXX increased $X.XX a accomplished AFFO which credit comments our balance last increased forecasting year. full XXXX was $X.XX $X.XX to are we through And metrics, increased disposition share. markets our sheet delevering throughout our of to guidance, range per quarter share. XXXX is to per guidance year Consistent our XXXX FFO to our per $X.XX capital projections and for when revised the to the QX current the

as AFFO improve retail acquire market rate. to balance in net million tenant of acquisition yields to overall and properties front, range and higher provide we of XXXX during to we guidance is real investment transaction spreads X.X% subject XXXX, and million of earlier, we generate to sheet at the occur will better our net between our and year a portfolio accretive some leased all the larger metrics these conditions delever similar On our valuations per which our drive increase time increase noted share. blended cap John of our believe we incrementally $XXX full current of acquisitions or will expect expect which exposures, quality $XXX our which finally, bottom end order to disposition now other And

John Our of the over for up asset forecast in high completed And low With end $XXX office to the end. and the revised guidance I'll back million closing sale includes million million the his Hillsboro, that, building disposition throughout year, at $XX remarks. turn and guidance the at by $XX of between Oregon. now $XX the million call sales already our

John Albright

We're driven our completion pleased Thanks XXX% retail. portfolio start to to and activity solid shift by becoming with strategic Matt. investment year our the strong the of our

a year, quality to earnings. portfolio a demonstrate attractive while investments has our the this lot towards volatility higher and driving our there market pruning been in of keep While resilient value selectively to the of we intend

plan. our outperform place of thank up us on a our for we the have for accomplishments. I long it continued of as our to questions. the to their We run, this want support Operator? over strong all team open roadmap time, and help we shareholders operational in At appreciate execute we'll

Operator

question with [Operator Instructions] Stevenson first comes Janney. Rob Our from

Rob Stevenson

the that's also Good your the for leases? so, that John, flat largest what point. Walgreens tenant? leases, whole that the you are time, a Pine And given portfolio now point sort phase those growth standard then And do this at at as no this guys if portfolio hyper is morning. in what to attractive bumps your does made bumps that of to the in still

John Albright

Yes. Thanks Rob.

It of was on -- smaller -- have driven get your we tax sellers you. a the question kind And done. latter just It not on attractiveness. kind what kind of was motivated, portfolio portfolio. it It on deal. of are or a wanted the So was to the

And price sensitive. they weren't so too

like across with a standard let kind a has it's does But got that. the price to of opine really the on on question quality the to that for portfolio, lease, the what And portfolio. Matt regards Walgreens So good we Walgreens lease look on to bumps we rent situation board. yes, feel answer that

Matt Partridge

post-sale acquisition Fargo, and Post the the of annual Wells in of Hey, terms. the existing half either about Rob. portfolio Yes. rent the has bumps or periodic Walgreens

Rob Stevenson

what that And is average now?

Matt Partridge

In terms of growth? annual

Rob Stevenson

Yes.

Matt Partridge

somewhere year and depends on basis points between XX XXX per average. the on it's year, It but

Rob Stevenson

that if happened. the But up, last gone here. the that that capacity I've your go that like for four And have rates rather expanding would big then over existing? down seven you or is out had into the Matt, be that's to some assume How new time in has talking in days beginning But replace last months debt I space. the of access parts expanded you access your of guys and these perfect. guys versus you well, three, where gone year, with over here would rates in Okay, your of seems REIT every cost spread years, borrowing. than debt it bank today, you of had significant group, new the you price some if of debt the transmitted five, your got jump to there stack,

Matt Partridge

say widened couple we had to don't there they've I it's moved have I unsecured Last and where out they Yes, on the think of on forward spreads bit on would year front which the little a largely forward a in the do hung really a lot out of, secured five out the swaps. about moved week, over check ago, swaps, X.X%. weeks is side,

rate which plus all to So you're the debt in where but a has year we're in XXX, from fixed been attractive us, spreads are, obviously, five XXX for new perspective, with X% new between and do swaps range

Rob Stevenson

pricing or the days, amount that out changes your would on these assets, that properties in size conversations you're there Okay. the that months deals And last ago? is pipeline, stages between happening early one the yet or brought of John, of anything say, in then being and to having terms three looking me, for six of sense either the you in or note own market at any of for any now

John Albright

as we're mentioned wider Yes, on interest been the acquisition our out far expanded last have market. certainly as earnings our have rates call, than and so as I cap

real I we're smaller we've that still expanded you've cap on color obviously guidance assets. So low rates very seen, strong give our type point you data seeing can some, disposition because as

into spreads more yields. reinvest we market, the And of higher because can higher so we're at properties those feeding our sell

going do that. we're So to

right So for seeing market. that's people the I really, bond we're because smaller And think what of the get to is pricing now strong of very assets. the you're seeing want out way

and with and fixed going a a rather investor, the bonds to asset you're the at lease basically of higher a real inflation a are estate strong you'd have long if the you into yield, So swap bad be estate. protection income real deal,

where you're out estate capital real sort that of and and for protection. movement, of think seeing asset I into So bonds better yield is moving

our And deals seeing so now. later that on we're seeing may not to right acquisition anything any year. in time take side, going good basically the the right come not we're now and We're

So kind we're being patient of about it.

lease seen side, tenanted seeing CTO, but side, that since the yet. on we active are On that the multi we're will maybe hesitancy buyer haven't as so you it come on net

long I So a have winded answer.

Operator

Wes comes from Golladay Our next question with Baird.

Wes Golladay

guys. you're the going buying morning, forward? you're in the are big more it what recycling I'd the in half a What do Hey, will asset to good you're on you strategy dig to of and looking second spread selling? like year. this part And of between what going type be of

John Albright

still buyer big be lower that the would great at properties cap part opportunity sell to see ability strategy. It'll the If a then be we a of and we spreads. higher rates, to at reinvest

a buying, about all say basis that do could and it's we're we're we'll selling be what XXX would general, spread So day. higher. little I point between what in But

Wes Golladay

of eat much that? And have transaction into you that from how I would would guess friction costs? what And type

John Albright

not It's of to material maybe issue. not, It's in the that be eyes material would I wouldn't it's I mean bad. given, gating not think a mean want beholder. I the

Wes Golladay

think to? Okay. through what the maybe you when the get the once done And asset can do the then with look year, recycling, towards end we that leverage, you're of

Matt Partridge

or at below Xx it to guidance, be on EBITDA. to projecting Based current debt we're net

Wes Golladay

Okay, and then me. one for last

would reimbursements more assets income now sales With any the complete office the you statement? in for have

Matt Partridge

beyond don't operating existed any first we No, in the what have expenses quarter.

out property the the on there. asset Not of bit a is from that'll that but higher little own, the continue leakage of some QX, with is portfolio. assets leakage Hilton much we there now So specifically in

Operator

Hau comes Securities. next Truist Our from with question Anthony

Anthony Hau

guys. Good how terms within that planning describe Thanks in my where the year you taking John, this do and sell question. morning, assets would for of rank portfolio? the you're to quality they

John Albright

sell we're get as Well, high investors looking don't are will I that maybe that assets locations view that such a to they of quality, premium that the research view quality, my is but pricing. think we and high the analysts being know some

a and with surprised Pine get the strong one the be impress that we're portfolio, we wake to up day has at investors fact the people on and and may distribution side. just So looking our very valuations

So And probably markets. but so type names and dodge appropriately credits. locations not not not with just public far just are that forth, really names pruning it'll to the more core valued questions your as be in as properly, it with portfolio the getting

Anthony Hau

reduce that planning you. exposure Got sector Is to given hyperinflation certain the you're a environment? there your

John Albright

lot banks a had we one-- Look, but before we -- in going of we was started didn't kind was dining, two, and of were couple were inflation costs years, the that early last we on up. it have crazy, labor of out casual sold selling we but over going

the so So And there really of those on in casual labor dining we we're like issues. took be of inflation if would costs. felt and bullseye off, both of kind

So that own that's we've then from and one away of one carwash. only we went kind

be That's so ESG asset, item view, discretionary could of have of kind And kind in candidate. of our a that only of one those. but disposition certainly friendly type not and spend

Anthony Hau

Got will debt by assume headed, be for for the sheet Matt, And are Should balance where what's you. fixed plan year last that rates one XX% the given we end? variable of exposure? me, the

Matt Partridge

the and long where the would the lot and variable with forward equity volatility fixed debt want as term, are we going But swaps of down pay I curve, pricing. to that we tell a rate forward opportunistic drag. and event raise you the rate there's the in or the over revolver to want Yes, preference fixing be floating some strong it We assets, the we're have is to to versus we my that existing balance rate having on in equity, locked versus sell on ability rate variable additional have debt having debt. debt because

see a on So lock forward market existing depending we'll at if rate point headlines rate we happening on what's debt, reasonable and look world, the do the in can that. a to we in where variable

Operator

Our with from next comes BTIG. Michael Gorman question

Michael Gorman

in much morning. of terms source the first go quarter to but solid the know you mentioned yields, a kind as thanks. volume. source in acquisitions on allowing side out in have volume I And the the you're seeing buyer to dispositions of on you're first guess, you change a the deal the just of for of terms John, curious, things, through there behavior not give obviously then quarter, terms Yes, lease net in Good environment, what offset seeing I'm the you confidence the that and relatively the of you that's side, you'll I year that planning? and volatile you're strong that kind of

John Albright

look, would I favor, out in with be our say, going buyer. that's kick the to that's marginal Yes, going the to volatility,

I And a special deal think by so and to are, acquisitions able have focus issues, team, whether where situation no with it. kind hit a of certain I we needs they a problems so team small somebody time group really being on to with great relationships need a get have deal no find and close with great we that can

kind position good now we've value. so in kind on, when need the good shot done we're very we sit to volume it. up our as we Right see we're gotten a So can that take a lot dial confident and of of back we when early

Michael Gorman

the it's have maybe whether maybe just supply seen amount up, debt volatility, on coming pickup you or any out Okay, of an rate future I increased marketplace, sellers valuations have supply concerned seen there? that maturity having about sellers product in you the guess have then side, and in

John Albright

need come seen Because that happen? come last deal you we Diego, you is, brokers flight ULI supply product are from But because And want could clients more on. back their what more to definitely possible. market if do to expect I San early So a to product, got what on it seen market the knows just telling get just in you to night. sell said. soon something, we've great What haven't of I as as who of

not of thing, seeing why seller year, would more, That yet. a so you're expect wait? If sort I but that this we're

Michael Gorman

then from of management bit in internalizing terms environment the call a current think me, side a Okay, costs on one go for on that's size generally how appropriate the last was of little rising framework the just you've labor the around you a obviously, change G&A economy, for things, you a that helpful. shortages, inflation in about And employees, on think at Pine cost to about and put it internalizing the the a kind all transactions, talk lot kind those framework of away is structure. about where the look forward, of of

John Albright

marginally for we at come structure, days, really, cost higher and it at Not Matt maybe we these thought was than about someone the doesn't sure. recently like any looked IPO cheaper

maybe or change market be proposition So don’t size yes, But, structure. really up would say have the for like marginally we'll CEO so gone value And need for and it it's the the that. something the I of that. that sure. to internalized we clearly, cheaper But we understand to dynamics of

So that lost us. upon isn't

think just just there. So of kind the we really I to size timing need is get the

So it's a not cost structure. burdensome

Operator

Jason next comes question Jonestrading. Our Stewart with from

Jason Stewart

the for move a bit cap sector medium rates, rates thoughts had most wanted on Good of sort we've your year-to-date. term at up the in Thanks. pull least a of had little outlook given and and been answered, get to questions I then morning,

John Albright

of we Yes, strong to financing expand talked on so on seeing or a the gap I and out very still call ULI, really more I And assets rates mentioned, with, as mean, are tight as out we're have cap and had sell. mentioned looking on surprisingly gotten we're component. seeing had I that so at more people that really pricing a things

right think multifamily important cap because rates, leverage of market it the leverage where the now if of is to you a part been I multifamily there down That's that's the has seen so is it and disruption like side. about lot think. So bringing

kind with it's the hope no volatility of really buyer it seen We XXXX that hasn't, any driven that haven't leverage, we single to the of and might tenant since expect. net really on as greedy lot a a see volatility by you investor So lease, assets.

and to disruption So so we why those we get if shots. some opportunity see that's see patient and be we'll of hope to some

Jason Stewart

to whether happens to then And any plan CTO Okay. of are the how I much own limitations what the us there wait CTO see there. upon? guess side, you ownership we'll can on can remind

Matt Partridge

Yes. Hey, Jason, about XX% by REIT CTO is The of rules structure an really that owns some the Pine. currently from around ownership limitation perspective. dictated and tax the of

CTO REIT So currently units that to OP can share the which currently own would up to shares, it Pine’s XX% holds. of in addition be

Operator

question comes Our Kucera Craig B. Securities. Riley next with from

Craig Kucera

continue Hey, good accelerate some sales. on morning, guys. last the that had John, inquiries potential those calls mentioned you last months? quarter few in asset had Have inbound you reverse to

John Albright

We will, the with those if been we have pricing of testing the not more get acting hiring and But the proactive in have a interest. very the be disruption we very really you and kind regular our calls. and waters, surprised certainly stock and of we stream really pleasantly assets. on amount market brokers decided like of to And favorably, on

to continue taking up that at to environment, after will advantage have help we'll of of And on redeploy closed. properties be spreads then and us keep set so, market higher that to sort ready

methodical movement that not started we properties month super-fast our talked but kind you, this, trying of reverse least kind some we're of that's where kind reverse on started So when time, taking off and have we before, or to process what have a do we're a us it's sell just a three inquiries, at with about we in had the that inquiries. when And sale here. of process regular

property and let's such saying, market prices And the if so that us got extreme see at valuation. really such hey,

a of little So that's behind context of kind it. bit

Craig Kucera

appreciate it I like perspective on helpful. quarters. stepping at pretty it. then reaccelerate perspective in maybe down that's we for the should acquisition an from quarter, settle maybe year. four the things just And been maybe kind expect for much slow second sounds guys to have last of you least tear the as But down No, to back wait from back, a half fair? and for Is acquisitions things you an that the here of

John Albright

told when is mean, rush want can that's really see do of impress to, acquisition volume. what with are we out in try the now we we're to Yes, I we We there to but team, kind we if no fair. the it acquisition want pain know possible. to market

our take time. so And we'll

Craig Kucera

And just making in more one the update me. any development on it. Jacksonville? grocery for you Are Got site

John Albright

question. do update, I Good haven't Yes. an we have but it. discussed

say track. just really negotiating grocer. reason new guess, just basically pottery timing, some in and it's busy, old Let's the that getting really all In in this And the been on been And with environment. I done, back is delayed the it's time why took time. everyone's

all to how logistics So it to it out. figure get how two groups together and works out

that's all So been done.

so you forth. update don't why So and timing look, we'll give an on next on quarter

Operator

Lavery, from next Andrew an Individual Our Investor. question comes

Unidentified Analyst

doing? ESG. board senior I leadership to question with What a does as just you ESG and about stakeholder the think whole? Hi, how regards and are have everybody, capitalism

John Albright

the take years, is proud deck our a very pine Florida, on and we're manager slide thing planted we've a our over in investor have trees at. mindful So of One XXX,XXX we're couple CTO, of last very as Pine, ESG, that boards. on should we we of of obviously, have you brought look diversity the on

And forward. keep small made. to of big we've that of on mindful we're as also the we issue of a can keep basically it's it, what proud do that progress very we what thinking But moving and so a very company, and we're we're know

Unidentified Analyst

if follow may. I up and with Okay, question,

the friendly you not and because You it water such. ESG mentioned you and based how of how ESG carwash wastewater is that I'm the uses, say assuming property, portfolio one in it's that's friendly, it of produces amount not very

you're too if you time rent you Do your you feel to of consistently Would paying off Now way of and now if our fiduciary due sell is kind do that you responsibility good just on suppose. assuming to portfolio it, because you'd guess to decide provides shareholder? be put kind to I fulfilling guidance, overall offloaded I it -- ESG. that feel property is the it guide the to you ESG property of

John Albright

what we the won’t we're tail the it so a really So get good wag if sell letting don't dog. price, we not

let value. So shareholder friendly basically a birds that the people lease commentary rock, water have, ground a can not. ESG we're will that as price that friendly with two won’t research investors, and it's concerned get we – very Very, was shareholders uses good will, and think about But one a decide as very water. are you let can whether analysts market. of we basically just for And or that carwashes lot and very if strong because we far are sure. do we a We hit that

Unidentified Analyst

Well, and say did to it you environmental sell good a I if it, that, and got price. was say and for you would purely reasons, you

John Albright

So, yes, Andrew. answered the just question, I

we're selling use wouldn't sell because we So it water. of because high a cap it rate at not of

Unidentified Analyst

someone going Well, would, of I'm buy and water. it's still lot it, is a you going else to just saying use to that

own So I'm now, page, the is wanted not we I noticed to comment. and properties relations on saying, that's believe one why that XXX I just I correct? final out investor point

Matt Partridge

quarter, end, quarter back but and the XXX. it's at to Fargo dropped XXX Wells with was It sale down after

Unidentified Analyst

XXX. Yes, Perfect. And it's XXX. I the it’s relations right. quarterly at then investor report saw earnings at page, Okay, on in all the

a wanted today's discrepancy closing concludes back John I like to session. there to turn Thank That the and call for all. wasn't make I'd So just remarks. That's sure Albright to there. answer you. question

John Albright

for the attending look to to questions. call and follow Thank just you. thank say you forward I up wanted

Operator

participating. today's Thank call. for conference you concludes This

disconnect. may You now

Alpine Income Property Trust (PINE) 22 Apr 222022 Q1 Earnings call transcript