Alpine me Property Trust(US:PINE)2024-10-18 17:52Financial Data and Key Metrics Changes - FFO was $0.45 per diluted share for the quarter, an increase of 22% compared to $0.37 reported in Q3 2023 [10] - AFFO was $0.44 per diluted share for the quarter, an increase of 16% compared to $0.38 reported in Q3 2023 [10] - Total revenue was $13.5 million for the quarter, including lease income of $11.7 million and interest income from commercial loans of $1.7 million [11] Business Line Data and Key Metrics Changes - Acquired four net lease properties for $37.5 million at a weighted average initial cap rate of 8.8% [4] - Sold eight properties during the quarter for $48.6 million at a weighted average cash cap rate of 6.8%, generating aggregate gains of $3.4 million [6] - The investment activity generated a weighted average yield of 9.2%, a positive spread of 240 basis points to the 6.8% weighted average cap rate on dispositions completed [6] Market Data and Key Metrics Changes - The company reduced its exposure to Walgreens, which has dropped from the largest tenant concentration to the second largest [6] - Investment-grade tenants now account for over 52% of the company's ABR, with Dick's being the largest tenant at 11% of ABR [7] Company Strategy and Development Direction - The company is focused on strategic asset recycling, originating high-yielding loans, and increasing the weighted average lease term [4] - Future investment strategy includes a barbell approach with longer-term investment-grade activity balanced by investments in higher yielding and more accretive assets [7] - The company plans to continue reducing exposure to Walgreens while exploring attractive investment opportunities across the tenant landscape [7] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the improved transaction environment and increased liquidity, leading to more acquisition opportunities [15] - The company is optimistic about the recovery of properties affected by recent hurricanes, with adequate insurance coverage in place [5] - Management raised full-year 2024 guidance for FFO to a range of $1.67 to $1.69 per share and AFFO to a range of $1.69 to $1.71 per share [14] Other Important Information - The company raised its quarterly common dividend from $0.275 per share to $0.28 per share, maintaining a healthy AFFO payout ratio of 64% [13] - The company ended the quarter with net debt to EBITDA of 6.9 times, improved from 7.4 times in the previous quarter [13] Q&A Session Summary Question: Can you talk about the transaction environment? - Management noted that the liquidity environment has improved, leading to more sellers coming to market and increased acquisition opportunities [15] Question: Can you provide more detail on the insurance arrangement for the Tampa properties? - Management confirmed that there are two years of business interruption insurance and full replacement insurance, ensuring minimal disruption [17] Question: How do you feel about your current exposure to Walgreens? - The average lease duration for Walgreens is 7.6 years, with the nearest expiration in six years, and management is actively receiving bids for additional properties [25] Question: What is the outlook for potential credit loss in the current macro environment? - Management indicated that the portfolio is in good shape, with proactive measures taken to sell underperforming assets [27] Question: Any plans to reduce exposure to dollar stores? - Management acknowledged that while there are some dollar store properties on the market, the focus has primarily been on reducing Walgreens exposure [29] Question: Can you discuss the size of your transaction funnel? - Management reported a transaction funnel of approximately $200 million, with a mix of larger portfolio deals rather than smaller transactions [40]