PINE - Earnings call transcript Q3 2024 | Alpine Income Property Trust, Inc.

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Operator

Good day, and welcome to Alpine Income Property Trust Q3 2024 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I would now like to turn the call over to John Albright, President and CEO. Please go ahead.

John Albright

Good morning, everyone, and thank you for joining us today for Alpine Income Property Trust Third Quarter 2024 Conference Call.

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

Philip Mays

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

www.alplinereit.com. With You presentation, I call the to reports, which SEC financial will earnings John. investor of back reconciliations most at the non-GAAP recent on can that, find contain use measures turn release our we and website our

John Albright

Phil. Thanks,

lengthen dividend, We enabled our strong leverage property as recycling, are our investment average reduced a with raised of efforts quarter combined very raise accretive third asset growth, earnings quarter These and in its quarterly our guidance. Beginning term. our pleased all another loan, originated to results aspects across year resulted earnings of with again reduced we high-yielding Walgreens continued acquisitions. full and exposure successfully and us strategy lease weighted our

X% million, Group. of have $XX.X term annual in leaseback area a During at properties these with all Hospitality properties the properties a lease rate quarter, include The years million for purchased X.X%. these Beachside we greater Three of located Bay sale acquired escalations. and XX for subsidiary for transaction weighted a a Tampa leases cap $XX.X were X net the of of lease average initial in

year the to the damage first properties interruption of the and and not these from and more to have Helene year. insurance them and robust than the due toward next material part of do to the operator hurricanes. did we sustain properties open any expect insurance during Hurricane While again operating Further, these recent coverage. these properties our or Accordingly, leases have expects end have some collecting require requirements, adequate rent Milton,

in current million, construction loan Additionally, The funded is shopping first we secured for loan Carolina. center a has by which public-anchored XX.XX%. Charlotte, commitment at amended in $XX North million an $XX.X and September, yield a and of closing initial was of mortgage purchased

well sales to the disposition million X for the $X.X at Supply included during Hobby cap sold leased weighted gains and as John of cash we properties Lowe's, average These properties X $XX.X Chick-fil-A, Long Lobby, On generated front, million a as rate of quarter Tractor aggregate locations Walgreens X.X%. Silvers. and

disclosed, sale As of Walgreens. reducing has largest. actively Walgreens concentration dropped during from to to quarter, tenant the the our with second previously And the exposure Walgreens largest X the we our are

to on our rate of of reducing tenant list. Overall, for basis cap locations attractive a quarter, investment our investments assets, completed. average the of we the for and given generated XXX X.X%, weighted both expect yield down our to exposure them Additionally, of to continue X.X% dispositions our concentration Walgreens weighted million remaining structured $XX continue the activity, positive a points acquisitions including spread average moving

is the result over XX% rated increased our and investment-grade X.X Notably, XX% our tenants, largest. investment-grade still our Group years. efforts, we now largest a third from strategic lease Beachside As to our tenant ABR is asset have derived now our DICK'S average of of at is weighted and of term recycling ABR Hospitality

opportunities. see across to attractive strategy forward, we Regarding opportunities investments. in to tenant invest including going attractive landscape, the while we our higher-yielding Accordingly, continue investment continue investment-grade

risk-adjusted attractive accretive given additional the allocating comfortable opportunities also are more We to yields. capital

more accretive activity longer-term activity in investment-grade with in balanced higher-yielding approach We by will investments result expect barbell and our investment a assets.

end the of of turning an Now At we to our the a depending the XX.X%. Generally, value, to average outstanding down, our at of target the investment of be of opportunities loan million, the weighted portfolio aggregate we structured yield quality $XX.X had quarter, loan balance the on investment or see. about some total will XX% portfolio to asset extent, scale but up this front.

are a we in quick a originate of to lot opportunities secured loans As to balance currently near-term by likely scale this portfolio up future. One note. high-quality, real estate, sheet seeing bit high-yielding is the

company's pleased the more common the Phil will net detail we of of to equity raising balance and for During the earnings increased utilizing markets, provide our our quarter, opportunistically in and were access discuss remainder outlook proceeds also $XX.X ATM the the million. capital program, the sheet year.

over the take a company of Phil, many wanted wishes the with the turn by speedy best the severe all call recent to our call our have I'll to send here over moment However, before Phil. behalf at and hope the I weather a recovery. And to turning for to to on to them that, impacted

Philip Mays

FFO There diluted XX% the an results. financial diluted quarter, the and than million. quarter, quarter of to XXXX. Total caused be interest that matters the with reported income in lower was million revenue of X interest quarter, compared to than share $XX.X third be $X.X loan for per to of compared income accounting share income third increase and lease Beginning the the some higher was for including loans of increase in XX% $X.XX quarter for $X.XX an you from XXXX. are the million income AFFO anticipated. have notable reported $X.XX the lease $X.XX may per John. was to of of $XX.X commercial Thanks, of anticipated

portfolio we a through in properties legal properties property our estate tax both consequently, acquired X constitute statistics. include First, These the purposes. and quarter them real for And sale-leaseback transaction. this

transaction of to be requires because treated options, this GAAP tenant a purchase financing. as However,

and a to we participation in also as Second, as reported last requires this loan, quarter, discussed transaction GAAP sold AX interest our be financing. portfolio an

loan the end, million. $XX.X John earlier, exclude items investments, reflects GAAP they our amount with investments whereas If at discussed million of totaled consistent X these outstanding our you from loan commercial balance sheet $XX.X quarter

GAAP or may matters reporting some the have impact differences, classification cause it for not item does AFFO. line these on any significant While FFO

sheet. the balance to Now moving

quarter, ATM the our shares total million. program weighted of utilized average of equity a share we issue approximately net price in resulting at proceeds common share, XXX,XXX $XX.X $XX.XX per to During

the raised along leverage, to quarter. increase of from loan common equity result As earnings recycling were in this per per Further, forward a X.Xx dividend quarterly quarter able commercial and and the with $X.XX from last $XX given EBITDA we our compared raise, our growing improve $X.XXX portfolio, the approximately to of we net accretive until with to our asset incrementally and of dividend, our share we debt common earnings maturing to X.Xx debt ending have liquidity reported share. to no XXXX. With increased regard currently million outlook,

covered, as payout healthy well remains AFFO dividend of this a XX%. ratio represents Our

with regards guidance. Lastly, to

range $X.XX We range share AFFO are raising our $X.XX and an to year an of to $X.XX $X.XX full per per FFO XXXX share. to of outlook

We to the have million nearing inclusive million $XX increasing $XX of and and dispositions, of operator, million. With we our $XX property investment range to closed now our to Accordingly, range investment of activity. are million $XXX guidance both questions. million investments open structured of $XXX and $XX a for line million disposition that, a of to

Operator

Michael UBS. first [Operator Goldsmith Instructions] comes from question with Our

Michael Goldsmith

the up reflective a you're transaction little seeing just first activity Is environment? environment materially second bit from liquid talk a picked Transaction What activity just the the about there? out increased quarter. more overall? quarter you the and of pretty Can

John Albright

Yes. environment the improved. Thanks, liquidity definitely, Michael. Yes, has

of are sort market seeing sell strategy. So and that assets wanted have you come and more move that through to folks to go ahead

that there we so there. risk/reward. And bidding are acquisitions. opportunities and finding like like the more more on in out assets We're And

see some so were And loan opportunities, investments. acquisitions much environment very we as on the as more pleased far being core and on both to improved

Michael Goldsmith

insurance And restaurants is the second closed right arrangement, a Tampa. more sale leaseback color related bit my Can it. on you then question many of these Got now. the little properties are in provide to of the

just providing reduced the the portfolio percentage. more it's there. And while of the has lot have investment-grade So detail also these increased then separately, some

kind just out the you factors to thinking you're portfolio? about as talk continue build can those X So how you offsetting about of

John Albright

Yes.

they restaurants, the more then storm, And storm, didn't the Milton, impact really first had on So the do second damage. more really so from Helene. much

there'll working XX end X that of days insurance, as those then there insurance. the next as and business the at as rapidly replacement as full year. And are better than years they're and happening be rather news interruption to far get on so back on open And of probably far there's

has And Clearwater so good is after they operator. ones we're of open, the storm. have ones open in restaurants amount that been have Coast with the in There fast the we're significant And contact a good are in the throughout have East state. the operator the the that on really shape thing and

be in to and And as won't people there because, be busy getting reopen pretty so probably these some they're are shape going other fast. they're good that a reopening unfortunately,

his is of reduced sort Street. our to so And on but there of not average lot of reason, basically, so to going extensions We some basis want be far as our and average competitors away on your be to rates quickly we if to as question to we compared wags it pent-up they're Wall our are look a for going demand weighted but there's And dog. keep go on portfolio, we'll be the as do the right increasing going look want for weighted can rate. And lease closer just low those giving are already is if a at as store you that restaurants. And early, lease low -- our to X that before. the satisfy our than now no portfolio, the life, to now so competition, some term so lease far tail to term benefit tenants to less really let going but really we're it to and be would

cap part real tenants is we do they're estate do and there's those with to we leases a strategy that, take could rate tenants But extensions. X, great been if advantage go do early need to get we years, maybe that we because quickly would had to spots. over higher that, X that really of So our other that's and take thought to of

more always yields the definitely, opportunity when load up we fit, so strategy. And it's that's good duration, but lease strategy. the a the real really the and -- -- been been good knowing market below really really term grab And replacement that's and at cost to we little kind estate try rents way but we'll below lower bit some extend can but been that see to and having the of some basis,

Michael Goldsmith

X And can in. helpful. I squeeze more if Very

with like about but you is, there, activity you now, would little loan talked of portfolio, could XX% the would a kind loan the at there it bit the You bit take take the then overall when times more high lumpiness more little like be it? And portfolio adds of inherently, portfolio it being earnings. to a higher. How

how about forward? you do kind go managing of going So that

John Albright

Yes.

Phil with that and with loan as the our come transactions loan So site. above I anchored with as we're total they and we situations in great go we remarks down. But we water was second kind shopping naturally relationships center as some did far off, to that these developers But just book. deal not mentioned the Publix have and now some opportunities pad looking we pad a we're docs and Chase of enterprise his have that site think burger that them will saw transactions the where side, if we're as third XX% know Charlotte with pays could value in of the starting book given loan we do process to maybe seeing them

so So Chase. or years public incredibly XX-year duration on great leases, on credits, lease XX long

the to own help. developer developments. from basically the sort and right finished. rates it. situation And would so Publix and we're the that love same-store other needs to of property X a months where here to gap have has if costs increased, go if between Publix to above Chase level. And situation buy the this we certain mortgage refusal it. And And they a cap of had a and complete where first to away happens have be the in being first And construction is only what We there's

So and great we It's risk-adjusted love markets. the opportunity. great yields

it looking the at of So it We're and it's yes, months we it, for away. one, lot and to a it's keeps pipeline. abreast a we're like us additional we opportunities. developers, going in with wave if But couple the merchant great X but the see of

Operator

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

R.J. Milligan

could exposure Obviously, your Walgreens in nearest for current curious with XX%. you a John, and maybe took exposure on duration. term the dispositions and lease quarter, us the average about feel of little some Walgreens bit and the down how you you to give Walgreens, now the I'm your detail under just some expiration lease

John Albright

Sure.

getting nearest in on and is selective. If X to duration have years. the have we active acquisition years. coming The So bit do, from we Walgreens lease have And week the earnings. lease We're we these of more. lot a being But may obviously, good X.X the or you a couple push bids duration. getting locations because we're had market, larger a average bids. of through a we good And saw in a up of this lift the we're

size, it to. very portfolio. match But much up get it's tell, an a take would it this X bids top But sold additional acquisition. So obviously, if small given nice wanted we bit. a kind that XX. XX, with be as we the out off it have But of to really you it X, to and on doesn't manageable only sticks given It's our can we

R.J. Milligan

Thanks. That's helpful.

And the on you're macro loss? potential given know macro you obviously, do loss we into think outlook And XXXX, current guidance, looking your guys environment impact credit the that what's XXXX I environment. just potential how and current the broadly, about so but more as for can't credit provide and

John Albright

mean, proactive X I issued. that is really, is has things portfolio our be say only in really good on, not operations Home a Home the selling an been shape, on we've issue, pretty sheet I that Yes. issue. and At At balance clearly, could would early

something their the not that And so lenders I position. company they're harm negotiate the to that going will suspect with

I'd one, to they'll that up. assume work the any and I up tenants these out. At credit But it would if split be and would can big type fill basis very leasing issue, there's we sort say of of the boxes say I Home So but smaller do low properties,

Operator

with Baird. Our Golladay from Wesley next question comes

Wesley Golladay

Dollar to Just stores? sticking with plans exposure tenant Any the reduce file. the to

John Albright

do we're They're sure. like of for is more And this answer to hasn't Walgreens market the $X It the focused of Walgreens piece. side. But question. small. some on given the a really There just so good more very are have properties on priority kind piece or are a -- A $X a million. million just we $XXX,XXX $X the yes, that million them been been

really and push that's rather than So Generals. the the Dollar been Family Dollar real

Wesley Golladay

you about? was Can then And Tampa How were Okay. would deal? How And be? you talk that can the to mentioned on you you that? there background a option. timing did about give able the some quickly close? come What purchase I rate think on the cap

John Albright

Sure.

CTO, that on the you had So operator as built And work goes X We beach. out as perform. relationship this with ago. X years didn't restaurants had the that know, back an Crabbys we didn't we --

to how over a So the done and know we Crabbys really take different and been brought concept, sales in high operate to performing. have they've very fabulous. They

they on iconic that do We million an have in option, not sale after we real sort have and operating stayed to a we've restaurants, purchase as can digits X purchasing that's to bring of the this in of the where opportunity equity lease real items so of million lease. the they structured at back came to we certain be buy double They over years, estate some together, IRR then to far after to in. a ticket a that things lot roughly about basically it had would properties. And amount big lot They And synergies touch West us. value. the restaurant obligation out them. to can the years And other an the they a unique very low them Coast. They $XX group buy were as $XX are in of with

the escalation. love the estate, annual yield, So love we the love real

case So years numbers us out scenario, minds, at sold our X shareholders. the is worst big gets in for for

Wesley Golladay

properties? the That that the that the end rent Campus a The presentation indicated Can period of And was include good. you rent Okay. clarify does $XX.X sounds press million. of cash as release number?

John Albright

Phil let I'll that answer one.

Philip Mays

Yes. Yes.

is a number number that that just number It's little GAAP and is than lighter the run a that. like is not referring cash the The XX%. rate. to the GAAP number So you're It's But number. GAAP different.

Wesley Golladay

look fourth plans for Okay. for bit When the floating Fantastic. or and capital then you a one balance the quarter, little that the X at any more And out you Would line. do get on last sheet you me. have markets, swaps? clear

Philip Mays

million we I floating think rate. we're on That $XXX coming rate okay have of is with debt, little a down. Obviously, the to we rate again. ATM got depending million capital But million $XX markets, there. look the We utilize fixed might $XXX floating.

little a with rate exposure there. floating okay we're So

Operator

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

Robert Stevenson

Walgreens stores, time? of today and is the dollar to really the much sell some portfolio want beyond stuff maybe John, the that of you how over

John Albright

opportunistically this really It's point. at selling

where is we think trading acquisition at us So an we to up, worth. what capital maybe a markets are big discount still the company have lined the

And like so the the you've as recycling, more would seen we in Rob, that past. we may sell But to of us something keep.

really everything would left like discard. say muscle things versus we're that to I kind of is So they we'd

So not and stores of a and lot beyond thing. that dollar the sort Walgreens

Robert Stevenson

the how you sale the characterize that low Is in quarter? would

John Albright

The buy that and and low could we're basically very XXXX they property sale really the because need, was a well, find that -- desperate a knew property not the anything market. had the acquire they're to to in very was comfortable. group

that sell premium at just desire. to their given able our situation, were we So a price, not

Robert Stevenson

the exposure. current guys And potentially the DICK's and prospect How talked of the you've above you it feeling about Okay. about Walgreens XX%? are the taking exposure

John Albright

but sort it's unique to property. unless going some down sell opportunity, we look to XX%, I don't of might think the there's grow then beyond

now. it above expect I wouldn't right So it go to where is

Robert Stevenson

in volume sellers of of looking size Can of and rate thinking today transaction we in the today big year. of how you sort and talk volume et cuts, in about funnel couple next interest typically transactions, is cetera? a how given quarters quarter your net fourth the the and of that's normal then should space the buyers And about be Okay. terms the triple

John Albright

the mean, million. really, funnel $XXX They're -- I minus rather right of is kind or Yes. the plus now chunky.

$X That's it's there. million maybe deals. here So a bunch not of portfolio and a

always, And like transaction, so coming else always we're being something a it but there's us. behind do picky it as we to seems as

buyers, market the feel out, to there given but advantage very that is of the about more there lot lending are now, right take capital ability we constrained. good So more the market -- is still a

we're opportunity like set still aggressive be us. good for so feel it's trying here, And a it to

Robert Stevenson

look then, much $X.X of interest through And the Okay. Phil, portfolio still the expecting think, and but income when you investments, you quarters? roughly I on the How not at of is in else that $X to flow over there that's the yet be should next to stuff. funded public commercial today million from million got, couple fund loans we almost committed

Philip Mays

of sales loan a transaction the is our about portfolio up leaseback financing. little comments that treated the outstanding. Look, we currently And because the grossed of when the participation have also. And you in it's portfolio is about grosses about that then a sale are $XX talked net as million I $XX The for that all commitments out, up about kind million million. $XX

little million there a the outstanding So and spread between commitments. over $XX

Robert Stevenson

a of or and isn't deployment did It's timing there forward, in restaurants $XX treated sale, financing right? any quarterly that? -- that million with the should the step-ups the line to right? Is the similarly are on item But basis, Okay. incremental quarter, going from that quarter a nor the $XX that off you transaction -- it the fall as continue a that the deploy third on neither million impact X being just

Philip Mays

Yes, generally correct.

sale there. not that mind in quarter leaseback, full in keep there's Just the a

So will little be next higher a it time.

of full kind is interest coming to through will, $XXX,XXX related a forward. close going that So you the run on rate income, if to amount

Operator

comes question Matthew Trading. with from next Jones Our Erdner

Matthew Erdner

that noticed sellers went and the most in exposure quarter-over-quarter, seeing the kind popping Can I and about activity where kind market. are Texas you're Florida where transaction the you up down. went up of of talk the

Philip Mays

priced just Yes. I It really There's California, any states. to pretty still tight. of of goes won't the lot say that's kind stuff a geographic. it's in big

Those are seeing XXXX for amount in a market. of sort Florida. are fair favored Texas We acquisitions and

pricing challenging. the So is sometimes

any major from. over of is So the it theme I where there's from the coming just but X say wouldn't seeing the jurisdiction states volume of is more of kind to the you're predominance other,

Matthew Erdner

those in that Yes. know. guys good you That's with going seeing of to forward you you get starting there, of glad sellers I'm made presents like think anything happen? down but to Florida kind wanting an Are of then markets? out And it do that kind to unscathed opportunity mostly out

John Albright

keeping I to restoration out someone maybe starting I or some for Yes. just done eyes seeing eyes our certainly we're but it. go some of work not to it want those are really see we circumstances. for if there but it with suffered right they're happen, out unique mean we're damage And through our kind and anything opportunities and don't keeping don't -- don't certainly where now,

Operator

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

John Massocca

So sorry.

in for Sorry, of call. between kind the But kind guidance the missed leasing what's in and earlier split think year, implied we I as of of the investments net of rest remaining if the this acquisitions? of mortgages the kind

John Albright

There's kind the and the I of balance would loan of, investment properties. mix X/X core side a being on say,

John Massocca

portfolio in I was Okay. kind own cap thing. helpful. then of Hospitality And of mean, the kind Beachside of That's rate, its very terms

out. that backing maybe So

You in typical is seem what of I today? high like you're in was the the Galaxy like the the cap Xs. mean, rate seeing on market that Golf

John Albright

we Well, a an see replace the what maybe investment-grade to caps let we're Lowe's but -- in find above. Lowe's me X.X% we predominantly may for bring we're and at, targeting had. opportunity looking exposure, to

Xs to mind wouldn't to be to down dipping back So up. opposed bring Lowe's our we wouldn't -- exposure we

but that's side, barbell, acquisition straight seeing what of of on So mentioned as it's roughly a X.X% up and little grade noninvestment is of Phil the above. kind bit the kind we're earlier, in

John Massocca

of portfolio non-investment-grade Lowe's? specific that to kind the again? in to increase systematically increased are Are you quarter agnostic? you to the due Is kind big Or Or investment-grade the exposure given of Okay. transaction. looking exposure

John Albright

exposure, seem I we'd the like market it it. appreciates doesn't mean the to really bit. like Agnostic, have but little a

to I higher So Lowe's stats, if a it. wedded get going credit helpful. that kind can of really our like to we're would we as be in But think opportunistically, up mentioned, put, I not back in

So it. but not kind to we'll look to do of that, married

John Massocca

last for then And X me. Okay.

the Florida, in Florida, restaurant assets you the of the bought percentage in how terms the or you In quarter, big in bought quarter -- X in assets of Crabbys in a are hurricane business kind what in of of those? disruption And the metrics. those guess, covered? coverage the what kind I creates on trailing assets, some rent was But of terms was

John Albright

Roughly, where we It like on were XX% to evaluation basically NOI. basically estate. buying the a our their real yield of was kind

John Massocca

the Okay. the portfolio terms operator? And of them for in of size overall as an

John Albright

they're as in XX%. stats, Well, our they're XX%, Phil, they're far credit as

John Massocca

to that -- pertains those business. the of I it assets X the side mean, as

John Albright

would sorry. say XX%. -- I it's there I XX%, about would maybe

Operator

Kucera from with Capital question a Lucid Markets. have We Craig

Craig Kucera

I quarter higher going due picked expect the that should the during just noticed this legal had higher bit somewhat expenses. G&A we to a G&A Or your Was forward? a up quarter? volume transaction of function

John Albright

onetime It acquisitions. time. do I have of one that but to certain it, was little was was of bit more that really mean a No, But amount didn't legal. with that a

Operator

further This are question-and-answer time. at conclude this There session. questions the no does

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

Alpine Income Property Trust (PINE) 18 Oct 242024 Q3 Earnings call transcript