Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the Alpine Q1 2023 Earnings Conference Call. At this time, all participants are in a listen-only. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded.

to Partridge. conference like speaker to now Matt today, would hand over the your I ahead. go Please

Matt Partridge

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

discussed remind from I'd future statements. these securities of laws. to in company's that actual our the statements comments we Before we duty everyone forward-looking federal begin, today may under significantly differ results matters like to and no statements, many are considered forward-looking The undertake these update

Factors filings. cause from differ time-to-time risks XX-Q, company’s actual disclosed materially detail greater results Form in the and to that could in Form are SEC from other expectations XX-K, the and

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

John Albright

Thanks, flexibility attractive our a quality with demand. allowed financial has to result liquidity reinvestment and improve continue more recycling Matt, targeted and positive heading to environment the a morning through initial a tenants. for our we're year, improve investment, of rated to year This into increase deleveraging positioned and balance selective We're portfolio execute transaction sheet, report to us expectations the to to we've everyone. pleased pricing and Relative to good experienced as active as our we start strategy. asset overall investment-grade predominantly

and be in advantage our demand with of of activities In terms sales market. chose the headline transaction take the opportunistic we during our asset quarter, to the

were sell properties. the headed where regarding attractive opportunities plenty underlying to While interest non-investment-grade of uncertainty find there macroeconomic we environment, to are and able rates is

X.X%, we a at largely total volume quarter, dispositions focused to a and we generating think XX $XX of gains exit the average quality total the of value testament million disposition the our of tenants cap $X.X a of The up underlying that tenants for rate communities. sold the majority million. just During portfolio's rated rents to which rate non-investment-grade Allen, rated to X.X a weighted of The of of some the name by lending of are is course, to concepts in by and cap included are the LA Ethan is, a occupied Go, high-quality that addition This the on this properties portfolio. assets and Conn's, is one-off representation Room non-investment-grade the great investment-grade to restaurant and few. properties leased tenants, largely on pricing more appreciated make investment properties real in our estate, Fitness,

As in X.X of the sectors. end of XXX with totaling of the consisted XX tenants feet square operating quarter, our portfolio million properties

Our and from all as Walgreens, our tenants, top with General & tenants them Sporting of Dollar unchanged Dollar Dollar mid-February earnings Family five call Goods, Tree, Dick's year-end Lowe's, investment-grade top our carry remain in ratings. credit

year. the with and of points from XX% an ended from last our base credit of points total with annualized up coming quarter year-end is which from this an We investment-grade increase basis XXXX basis rating, XXX time XXX rents tenants

Sporting and Verizon, strong by we have we prudent The Marshalls Chick-fil-A. opportunities a contract built Buy, took such we've Depot, quarter, Lowe's, we'll outline under that acquisitions Best first to and redeploying HomeGoods, quarter. leading Goods, assets the a pipeline While are approach second Starbucks, into Home the as retailers occupied during be DICK'S of industry

which peers the an we that to FFO to of looking active the forward tenancy never higher after similar acquire is prefer investment-grade who improve overall drive our to level but investing discuss considerably XX%-plus multiples. transaction until assets generally We portfolio is our closed, quarter it guaranteed because will into quality we're range, have them and

net accretive disposition we're proceeds the assets execute investment spreads. to forecasting our of redeployment these importantly, More and into high-quality

positive better our fully While of stabilized we've spreads our for XXXX, materialize organic of AFFO FFO recycling, in in asset is and our XXXX will deleveraging to additional will investment without the with to AFFO risk-adjusted effects timing growth XXXX and due guided net constrained FFO currently capital largely the that need the and tenancy to us allow what environment. drive a and capital below

Finally, we and achieved the to past structure. six it's cap our implied stock months which implied dispositions which and XXXX. on tenants together And Furthermore, of debt X%. is highlight significant trading over have contrast important in capital currently covered We're stability balance complements an our discount X% and this supports at no our that's with current well of rate quality portfolio cap above price interest our and valuation overall the rates portfolio, well nearly stability our the with high-quality yielding our improving floating rate, and the dividend value. no exposure of sheet until the credit maturities strength

quarter performance and With over about guidance. talk that, the to I'll turn revised first to call our Matt

Matt Partridge

financial Beginning with John. results. Thanks, our

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

$X.XX per XX% First also share, quarter was AFFO decrease per of over or XXXX XXXX. the share a $X.XX first quarter

have in activity, X.X% benefited was by first year-over-year total $XXX,XXX our quarter but sale non-repeating office the revenues, our remaining was which a percentage results of benefits sales increase which occurred quarter our first driven asset efforts XXXX full year of to yet spread the rent revenue recycling in resulted and investment for of negative in and proceeds of from partially property that Our the from sole by reinvested XXXX. received drag from be QX that the investment XXXX, offset the asset

our and equity as due and to fee our to interest predominantly rates, to expense in offset increases general debt paid higher administrative a to Offsetting by a an our external overall and lower increase the partially higher due was was which our of balance. activities manager management capital X.X% XXXX revenue markets interest expenses, result outstanding year-over-year growth XXXX

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

the program we of proceeds per $XX our for total XXX,XXX stock shares at quarter, During nearly price of $XX.X ATM average net common issuance for million of issued an gross share.

capital sheet of mentioned, John balance cost overhauled As our our in structure. we've our months to and XX the lock over overall debt stabilize past

out commitments, our time meaningfully pro our increased of EBITDA our that and frame, XXXX and beyond, through XX-month debt, rate we times remaining undrawn floating $XXX maturities liquidity nearly During all more revolving potential than cash. and combination outstanding X.X debt forma credit net any cash by and extended fixed to to facility a reduced restricted million to debt of

coverage We and net at with charge our EBITDA the fixed healthy forma times. X.X total remains ended at to enterprise debt value year pro X.X times, to very XX%, of debt ratio net

As with rent. straight-line we rent the $XX.X in-place second million, base of of annualized began quarter annualized or look forward to XXXX, the million $XX portfolio-wide balance base cash in-place we of

of asset near-term maintained $X.XX increased per respectively, $X.XX full after guidance for share timing earnings of per the associated drag $X.XX and to recycling the share We and AFFO effort. our even with year per share to accounting $X.XX our FFO

balance million the elevated also disposition our and of at at end the for high we've for retail and to sales through sales asset account the asset guidance a lease of unchanged revised range end increased $XX investment and to net $XX Our our of the at remains low million investments guidance by $XXX $XXX million expectations million QX year.

has Overall, positioning XXXX. XXXX we're asset strategy, the unique improved drive company and future well long high-quality growth over forward to run on our confident executing for portfolio and to earnings liquidity, increased sheet our value us and recycling we the guidance in look positioned balance

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

Operator

comes [Operator Mehta Instructions] with Hutton. EF Our first Gaurav question from

open. is line Your

Gaurav Mehta

you of some color guys? expecting like of you on to you. morning. of Was on dispositions. then XQ? that this is proceeds the marketed redeployed the I what in fully terms the proceeds, to all wanted transaction sales you Can Thank or deployment And sold? you the off-market are provide more for Good be in you assets a ask

John Albright

Yes.

So sort transactions. combination thanks dispositions Basically, of of off-market very a the were much. and broker-led

really to started off-market were and we at really kicked getting book for interest cap that value. -- I dispositions sell felt and we and got us earnings accretive the very it think off opportunistic when rates company the to

that's so And second will the it on the then to the repositioning quarter. done down be quarter. but sales, There of the -- second most like a and in is get of it goal lag, I little of the could be in most feel

Gaurav Mehta

What's Okay. X.X the your And then to your down leverage going expectation leverage forward? was side, times. for the leverage on

Matt Partridge

Yes.

of we transaction, we'll mid-Xs low-Xs the we things after if where can forward. in be without, that I operate assume the on think in live general, a the structure but the side mid-Xs find probably figure unless something we'll unique really you is acquisition can't go we'll it's and range for capital out fact or probably that

Gaurav Mehta

Okay. Thank you.

Operator

Thanks. One moment next our for question.

from Our next question with Erdner JonesTrading. comes Matthew

open. is line Your

Matthew Erdner

coming for for the the Matthew from, of expectation buyer profile is the Could demand about Thanks for from where of on Hey, and demand talk Jason. guy. question. forward? the taking the going the dispositions you kind and

John Albright

but property It's purchasing net are all back. there it's own board, kind primarily, over but high their franchisee some of the worth,

private capital. not institutional a So mainly mix, just it's total as much

Matthew Erdner

is look of you'll Got whenever just it the you that's an to you. what to grade? fits, to if take? And offer then going are it non-investment you of kind Or guys then continue dispose see

John Albright

grade. the Street we our the trade the explore the the No, cap to there's going rates. given of we're further But to higher definitely location price, rates with or that lower. those think potential, cap be stock disconnect redevelopment properties credits obviously in credits in would probably where know some at thinks We non-investment

So and higher print and at we'll redeploy tickets profits continue print yields. to

Matthew Erdner

you. Awesome. Thank

Operator

question. moment for next One our

Our next Colliers. from with question Oxford comes Barry

Your line open. is

Barry Oxford

percentage the function leases that to function in it than going the were of tenants not Thanks. lower. rent? Great. structure of the fixed you that rent being of comments back a more are the Is is -- your previously. percentage more hitting a of tied they Guys, of Or mentioned to

John Albright

bit a We Hey, percentage asset lease we…. a It's the we acquired unique it. But in an recasted little where bought before situation. that was rent Barry. of we

Barry Oxford

Okay.

John Albright

a of right to in As we percentage year bought the it. acquisition, the we had rent the that part

our the recasting structure to recasting increases. but rent so had the going it, with the the benefit fixed just of rent And we lease forward lease the is percentage of prior from

Barry Oxford

Great, great. Okay.

XXXX disposition, to Or whereas do being you like XXXX Now acquisition as when heavy? a where be far we acquisitions year numbers be that being fairly we net close do see won't see XXXX other. heavy on as each the two XXXX quite will net look XXXX versus to this

John Albright

be obviously the we a net say, match going we be side, conservative would and on goal I but we're to of there. funding, get mean, is and anticipate we'll acquirer, I think the kind

but see a want growing, opportunities what acquirer far of front and on upgrading as in the side recycling, to Given to than We net we we're and that. the think be will, us better obviously, keep organically do as to fully I we'll portfolio. conservative but is buy

Matt Partridge

to off just John's Barry, piggyback comments. Yes,

going it's not think a We're I just step to price shareholders going to acquirer. to be be net dependent.

So as the But markets. having to grow this for without portfolio, runway capital the rely with earnings incrementally some give net recycling to and us the acquisitions. that upgrade we stock capital will responds continue hopefully, on the

Barry Oxford

are not you or necessarily? John, being seeing question. last And retraded assets Right.

John Albright

get be I the have credit. the think lease -- with comforting, finding little People thought the and think necessarily. might safe to out Not bricks be mean, there and of me of market, bit But would in the as and you like with kind net side get would of a one that as active and more people stability are into bonds be volatility retrading. CDs good they're might stocks and not sticks I

Barry Oxford

Right. guys. sense. Thanks, Makes

John Albright

Thanks, Barry.

Matt Partridge

you. Thank

Operator

One question. for moment next our

question next Wes Baird. from Golladay Our comes with

open. is Your line

Wes Golladay

firm? about you your have maybe rent? good any overall to in watch to there Hey is list? just discuss you Do it portfolio? the a how changes have And morning talk City, I health? guess, watchlist the evolved tenant Or the changes guys. Was any then Can -- Party

John Albright

Yes.

too keeping the let But kind even have because But credits ones of Matt on much cases. obvious future. as our the don't detail. that of what's the the definitely Party open want to eyes and very isn't we kind list, really I yes, discuss I'll watch better in on have is in So into are on the watch go some may deep sort the gotten list first on we've been what assets there. issues on far rents of selling going as that's kind of City,

Matt Partridge

Yes.

free they're Party of it to based with going looks at rent haven't strong on process, today anything -- City be just month strength estate but given lease, with and we've a the like on might we the something So would them the finalized we a help out that real just we're underlying that West, -- or give what but pretty a line reaffirm we to their lease held know of

John Albright

is there how we strong one, they interest in that sales, I City know that other because know on knows their strong that there -- think some And is location but are like space. location, Party definitely -- they people would the how probably know and backup

So great there. position that their negotiating isn't all

Wes Golladay

Yes.

of that you you I the was last Do a back an dislocation. the maybe Okay. right mean, the cap the a at very seeking you assets question And potentially in market, cap picture you you're guess, bigger appear the things an the strategic mentioned That's evidenced you're I on there to demand portfolio. good. portfolio the the revisiting be the In optimal Are in that the position. now? achieving of past, portfolio of alternatives end over trading to here? maybe rate. wanted part, prolonged you're on here. And then one X% there the more into last as get year to by to Yet high do alternatives think lower private of was

John Albright

not. we're No,

So and the yet again, we where still exposure disconnect. finally, and think higher the We market I investment-grade our pruning not take before, think kind And figures been improve seen Look, it we portfolio really disconnect. drive sort even mentioned, cap we short of achieve some we've properties, rates value stock investment-grade even answer. the to to noninvestment-grade have where almost as there's redeploy And this do, to our out. of further. value the can,

market, is is really be of small And got commentator caps our a skyrocketed the on volatility belief definitely you Our part the hammered, when and it. would better the it. that were really belief in we

at look folks, off X, even other on way where Page our shows So has a believe, if of kind you gotten lot I the trading better. our investor pine started though presentation of portfolio

figure away or spot be feel hasn't keep the lot ground as guys portfolio, we'll just And improving in think on a up much. of really a growing NOI, organically so the in But the least will it the long revisit make keep and short on gone things like the at we disconnect we'll to better out. if there we'll I later year

Wes Golladay

the Thanks everyone. Great. for time

John Albright

Thanks.

Operator

One our moment for next question.

Gorman comes Our next question from Michael with BTIG.

Your line is open.

Michael Gorman

hold sorry you Yeah. I the Thanks, if for period that missed good the average it. morning. John, in assets was sold the What quarter?

John Albright

Good about year years. to it was, call X.X question. a Mike, it,

Michael Gorman

then it. Got Got Okay. And it.

John Albright

Probably consider X.X years.

Michael Gorman

years. X.X to Closer

of reflection But some focus Okay. the the investment in kind grade out Perfect. where that's the non-investment And nature electronics And about versus are also of the just of of where to the that fitness, some on which of industries of be a right obviously, Or the with assets would casual. you're tenants health consumer you of lot also industries, industry tenant, portfolio those then from sense. quality makes an willing grade, certainly, diversification, the back came a those? looking of perspective? go into fine? industry Is through down, went of the fast thinking

John Albright

Yeah, very good question. that's a

pops, mom or clearing big is of that financing in real locations we cap pruning the as we and will advantage house a no sell we're other lot definitely But of arbitrage market we take be take sense. sellers of and rates as We'll perceive of may we credit from credits advantage that and selling kind some where think. properties these if the dislocation kind on we too credit people good estate the there side, see go are opportunity, if the the troubled, of an So are a the tenants in we some on market disposing either definitely of some being into than back better general, can people that. where and be but think being like make

of effect having IG, dislocation see yield So take more bit but some mix advantage little higher a a you'll definitely buying of of barbell definitely in.

Michael Gorman

of really used That's dispositions. buyers then or one one put helpful. close? clear leverage last to Okay. on the many leverage transactions place before in How the the they And

John Albright

Almost zero.

Michael Gorman

guidance anything the And so far? okay. in assumptions year well Matt, side, then But share me, put in for the the with count as missed FFO the interest for the last I but I sorry little one went it, change most, you more -- given know guidance disclosures. and All little you don't on the bit. if expense I down a rates noticed, I in Did bit think a stability interest

Matt Partridge

-- for on XX million interest side, we -- the on revolver. outstanding for the swap so us, a for entered We into the

And going that so forward. expense interest stabilized certainly the

benefited bit the was yes, definitely half pretty set that front a the of in little although So half back the year. back in on we steeply curve guidance, the of the to drop yield

of relative we So as assumptions. to liked big have it benefit the as a would wasn't

From a probably active total stock just it the price given be ATM in where not reflects really share the count that to the coming perspective, is. acknowledgment months we're going on the just

the And share so reduced that's why count. we guided

Michael Gorman

guys. Great. sense. for makes That the Sure. time Thanks

John Albright

Mike. Thanks,

Operator

One our moment next question. for

Our James. with next from Milligan comes RJ Raymond question

is open. line Your

RJ Milligan

good question just on guys. to in wanted up follow I Thanks of morning, and Mike's guidance. terms

the more obviously, you disposition allowing front-end And now year? maintain are but the positive just I'm are that unchanged, for what curious, is guidance So loaded to activity. impacts Matt, guidance

Matt Partridge

Yes.

the of just and at activity, dispositions having is reduce additional it's leverage, don't end similar that's the the for being investment related share getting we more we're gains that is can relative we're leverage given returns, offset, out Obviously, active to benefit are assumptions, that a as activity previous our that drive by there's where any helping putting offset we in think leverage incremental disposition shares I from way not saying net assets helping where picking rate the spreads not better long sell count question, swap. we're more of on consideration elevated and ATM, we front allowed activity, It's to things. interest how so have as referenced to to offset the of the use helping need a on RJ. timing So which good disposition we're drag couple it's many being a on up there. the

RJ Milligan

And sense. quarter, makes That boxes. deliberate it. or be curious were a the Got just the them more happened that strategy to larger just I'm bulk more first of in a then was dispositions if if coincidental? that is

Matt Partridge

Coincidental

RJ Milligan

That's for me. it Okay. Thanks, guys.

Matt Partridge

Right.

Operator

One moment for next our question.

Our Stevenson with Rob next question comes Janney. from

Your line is open.

Rob Stevenson

questions terms Good been my cap guys for of acquisitions in spread is assuming dispositions have rate and the But morning, the John, what these Most of between that days answered. you the guys. it are year? the

John Albright

and X.X answer it mean, X.X we're targeting kind of from I'll different way. to and possible as blending higher to range. X a much anywhere as I

what So a it's a bit little of seeing. bandwidth we're in

Matt Partridge

Yes, we're obviously, opportunistic, given Rob, acquisition the that's side, on that's the… And being – disposition on side. the pretty

Rob Stevenson

have between pricing in the and year beginning today? difference the of And any guys you seen

John Albright

So the investment grade there. is still hanging in

buy we're movement cap expansion up So lines. leases regards more to there and their with weaker we're going with or a Obviously, lot seeing seeing of are been may having sell now rate some rates to either opportunities discussions portfolio We're credits, didn't and opportunity. there developers and who hasn't to up you're credit recapitalize. definitely, they basically and weaker seeing a shorter really that a have lot the -- on credits, want

transaction forth now fairly of are to optimistic think there's because maturities for some so really we're that be this rates into I just definitely creeping some just will so going builders. And interesting, these merchant opportunity debt and be summer that the

down be there so good the coming road. some -- So, honey should

Rob Stevenson

line Okay. this all given your months through last over Matt, for are? few today you point that credit be to various where have next And you do sources access the of and would attractive at then than one to me. and any debt fees the more pricing and

Matt Partridge

longer I if to mean, it obviously that yield benefits curve, in in we Yeah. rates can the a capture swap. for inverted lock with us

side, maybe into profile look a relationship potentially or entering to different bank, than go or the different on we we rates placement at. smaller fixed to private of has floating some relative the we're a few deal areas revolver whether the on approach swap the who with I So think were the to can a institutions if out that rate there's larger to we

trying have first we but through the to as quarter that Certainly, is to access we're and did given and the as center front much recycling indicated where balance utilizing the the just we it sheet have as debt assets is in that today, and run year. of balance where

Rob Stevenson

there's lied, half about other in one then Okay. I or vault mean, $X.XX the no the question of through, on FFO did that's say, following was I sort quarter last than up earnings. that's you back guess year right? the cadence the And I that, of into, coming the other abnormal of things acquisitions, a like anything

Matt Partridge

assume dispositions. say I of redeployed from terms the of to back-end everybody I the get think the of sell the of that during the questions probably will modeling So the assets be continue quarter. second We'll quarter can weighted in in dispositions would that to a second the timing perspective, one majority earlier,

will on more as the the quarter in well. think towards quarter quarter acquiring maybe is and cadence fourth the selling And trend and a mid probably end of towards third period the that of of I the be

second evenly acquisition will then, perspective, And quarter so our guidance fourth? third means and be of think, sort the the the And and of can from you disposition fourth pretty what what distributed quarter. the the is I implied for second, activity back balance between third in that into and a

Rob Stevenson

Thank Okay. That’s helpful. you.

Matt Partridge

Thanks Rob.

Operator

at further this John, remarks. back closing any over to any time. to showing turn I'd call for not like And the I'm questions

John Albright

the much for much very call. very you Thank you -- attending thank

Operator

this gentlemen, today's does presentation. and Ladies conclude

wonderful now a disconnect. day. And may have You

Alpine Income Property Trust (PINE) 21 Apr 232023 Q1 Earnings call transcript