Alpine me Property Trust(PINE) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - FFO per share grew by 2.3% in the quarter and 4.8% year to date compared to the same period last year [5] - Total revenue for the quarter was $14,900,000, with lease income of $12,000,000 and interest income from commercial loans of $2,700,000 [11] - Year to date total revenue was $29,100,000, including lease income of $23,800,000 and interest income from commercial loans of $5,000,000 [11] - The company repurchased approximately 273,000 common shares for $4,300,000 at an average price of $15.81 per share during the quarter [11] - The quarterly cash dividend was maintained at $0.0285 per share, providing a current attractive dividend yield close to 8% [12] Business Line Data and Key Metrics Changes - The company sold five net lease properties for $16,500,000 at a weighted average exit cap of 7.9% [6] - The portfolio consists of 129 properties totaling 3,900,000 square feet across 34 states, with an occupancy rate of 98.2% [8] - The weighted average remaining lease term increased to 8.9 years from 6.6 years a year ago [9] Market Data and Key Metrics Changes - The company reduced its Walgreens exposure to approximately 7% of ABR, down from a larger concentration a year ago [6] - The market for Walgreens properties is active, with cap rates ranging from high 7s to early 10s or 11s depending on location and lease term [30] Company Strategy and Development Direction - The company is focused on a barbell investment strategy, pairing higher yielding acquisitions with quality tenants [5] - The investment guidance was increased by $30,000,000 to a new range of $100,000,000 to $130,000,000 for the year [14] - The company is actively pursuing both property acquisitions and structured loan investments, with a focus on high-quality opportunities [17][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acquisition and loan investment opportunities, despite a competitive environment [17][35] - The company is managing leverage carefully, with a net debt to pro forma adjusted EBITDA of 8.1 times [12][47] - Management expects to maintain a balanced approach between selling assets and making new investments [68] Other Important Information - The company recorded $2,800,000 of noncash impairment charges related to two largest vacant properties [13] - The Bass Pro Shops lease was amended to a new twenty-year initial lease term, with a rent increase of approximately $40,500 per month [57] Q&A Session Summary Question: How should we look at investments for the remainder of the year? - Management indicated that structured loan investment activity seems closer to happening than property acquisitions due to competitive conditions [17] Question: What will be the quarterly AFFO impact from the public loan payoff? - The impact is expected to be a couple of hundred dollars a quarter, translating to a little more than a full penny per quarter [22] Question: What is the current market for Walgreens and At Home properties? - The market is active for Walgreens, with cap rates depending on location, while At Home properties are attracting interest for redevelopment [30][31] Question: How does the company view its leverage target? - The company aims to manage leverage appropriately, with plans to reduce it through asset sales and maintaining free cash flow [47] Question: What is the target for Walgreens exposure in terms of ABR? - The current exposure is around 6.7% of ABR, with a target to reduce it below 5% [49]