Portfolio and Property Management - As of December 31, 2025, FrontView owned a diversified portfolio of 303 properties across 37 U.S. states, with an occupancy rate of 98.7%[20] - The total number of properties in the portfolio is 303, covering 2,687,000 square feet, representing 100% of ABR [32] - 78.1% of FrontView's properties were located in the top 100 metropolitan statistical areas (MSAs) as of December 31, 2025[20] - The company targets properties with direct frontage on high-traffic roads, ensuring high visibility and adaptability for various tenant usages[19] - The geographic diversification shows that no single state dominates the portfolio, enhancing risk management [32] - The company’s strategy focuses on maintaining a balanced portfolio across various states to mitigate risks associated with regional economic downturns [32] - The company’s properties are strategically located to optimize rental income and tenant diversity [32] Financial Performance - Total rental revenues for the year ended December 31, 2025, were $66.5 million, with a net loss of $5.6 million and funds from operations (FFO) of $26.1 million[20] - The total ABR (Annual Base Rent) as of December 31, 2025 is $62.852 million, with a weighted average rent per square foot of $23.74[38] - The company recorded net losses of approximately $5.6 million and $31.2 million for the years ended December 31, 2025 and 2024, respectively[79] - For the year ended December 31, 2025, the company incurred approximately $1.8 million in expenses not reimbursed by tenants[39] - The company may not be able to make distributions to its stockholders at the times or in the amounts expected, or at all[71] Tenant and Lease Information - Approximately 34.8% of FrontView's tenants had an investment-grade credit rating as of December 31, 2025[20] - 97.3% of the leases based on annual base rent (ABR) had contractual rent escalations, with a weighted average remaining lease term of approximately 7.4 years[20] - No single tenant brand accounted for more than 3.51% of the ABR, with 321 tenants representing 155 different brands[20] - The top tenant, Dollar Tree, accounted for 3.51% of ABR, while the second-largest tenant, Verizon, accounted for 2.85%[26] - Approximately 65.2% of the company's tenants had a credit rating below investment-grade or were unrated, which increases the risk of tenant defaults [94] - Tenants in the restaurant industry represented approximately 23.9% of the company's ABR as of December 31, 2025, indicating a significant exposure to this sector [96] Environmental and Regulatory Risks - The company is subject to significant environmental liabilities due to federal, state, and local laws, which may require costly investigations and clean-ups for hazardous substances[56] - Properties may have historical or current contamination issues, potentially leading to substantial clean-up costs that could exceed property values[57] - Environmental regulations impose strict requirements on the management of asbestos-containing materials (ACM), with significant fines for non-compliance, affecting property values[58] - Mold growth due to moisture accumulation can lead to costly remediation efforts and potential liability for health issues related to indoor air quality[59] - The company cannot predict future environmental regulations or conditions, which may necessitate significant expenditures to address environmental issues[62] Debt and Financing - As of December 31, 2025, the company had approximately $314.3 million principal balance of indebtedness outstanding, which may expose it to the risk of default under its debt obligations[71] - The company has entered into interest rate swap agreements to hedge against fluctuations in interest rates, but these arrangements may not be effective and could expose the company to additional risks[164] - The company may face challenges in accessing external financing on commercially reasonable terms due to disruptions in financial markets, which could limit its business activities[160] - Interest rate increases could lead to higher interest costs on existing and future debt, adversely impacting the company's stock price and operational results[157] Corporate Governance and Structure - The company completed its IPO on October 3, 2024, issuing 13,200,000 shares at an initial price of $19.00 per share, raising total net proceeds of $271.5 million[23] - The company has the authority to issue up to 500,000,000 shares of capital stock, including 450,000,000 shares of Common Stock and 50,000,000 shares of preferred stock[169] - The company’s board of directors can change investment and financing policies without stockholder approval, potentially increasing leverage and risk of default[183] - The company has entered into indemnification agreements with directors and executive officers, potentially limiting stockholder rights against them[185] Market and Economic Risks - Tenant demand for properties may decline due to economic conditions, which could materially and adversely affect the company[91] - A significant portion of the portfolio is leased to tenants reliant on discretionary consumer spending, making it sensitive to economic downturns[134] - Increased interest rates may decrease property values, adversely impacting the company's financial condition[137] - Inflation could negatively affect both the company and its tenants, impacting their ability to pay rent[139] - Natural disasters and climate change risks could lead to property damage and operational disruptions[140][141] Compliance and Taxation - The company intends to qualify as a REIT and must distribute at least 90% of its REIT taxable income to stockholders to maintain this status[200] - If the company fails to qualify as a REIT, it could face significant tax consequences that would reduce cash available for distributions to stockholders[195] - The company may be subject to U.S. federal, state, and local income taxes even if it qualifies as a REIT, impacting cash flow and distributions[199] - Changes in U.S. federal income tax laws could materially and adversely affect the company and its stockholders[213]
FrontView REIT, Inc.(FVR) - 2025 Q4 - Annual Report