Financial Data and Key Metrics Changes - Cash rents for Q2 were $15,700,000, an increase of $600,000 or 4% from the previous quarter, driven by acquisitions and increased percentage rents [14] - Total revenue increased by $1,300,000 sequentially to $17,600,000, including straight-line rent and other income [14] - AFFO per share increased by 2 cents or 6.7% quarter-over-quarter to 32 cents, with a declared quarterly dividend of $0.02, representing a 66% payout ratio on AFFO per share [17] Business Line Data and Key Metrics Changes - The portfolio ended the quarter with an occupancy rate of 97.8%, up from approximately 96% in the previous quarter [6] - Five properties were acquired for approximately $17,800,000 at an average cash cap rate of 8.17%, with a weighted average remaining lease term of approximately 11 years [9] - Nine properties were sold for $22,700,000 during the quarter, recovering approximately 90% of the original purchase price [10] Market Data and Key Metrics Changes - The company is targeting a cap rate trend around 7.5% going into Q3 [11] - The current leverage ratio is 5.5 times net debt to annualized adjusted EBITDAR, with an LTV of less than 40% [10][19] Company Strategy and Development Direction - The company is increasing its capital recycling by raising disposition guidance to $60,000,000 to $75,000,000 while reducing acquisition targets to $110,000,000 to $130,000,000 [11][20] - The focus remains on acquiring high visibility properties with strong credits and attractive valuations [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong performance despite reduced net capital deployment, expecting to achieve between 30 to 32 cents per quarter for the second half of the year [24] - The portfolio is described as healthy, with negligible credit losses and no material additions to the watch list [25][52] Other Important Information - The company has expanded its tenant disclosures to include its top 60 tenants, providing greater insight into the portfolio [13][60] - The balance sheet remains conservatively positioned, with a strong liquidity position of approximately $140,000,000 [18] Q&A Session Summary Question: Why is the midpoint of AFFO per share guidance unchanged despite reduced net investment volume? - Management indicated strong operational performance and confidence in existing tenants, allowing for a reasonable target of 31 cents per share for the second half of the year [24] Question: Will there be adjustments to bad debt guidance given the improved leasing progress? - Management did not provide an update on bad debt guidance but noted a healthy portfolio with minimal credit losses [25] Question: What is the expected spread and cap rates for acquisitions and dispositions? - Management expects a 50 to 75 basis point differential between selling assets and acquiring new ones, with continued opportunities in the market [31] Question: What is the size of the acquisition pipeline? - Management indicated a robust pipeline for acquisitions, with the potential to increase the pace of acquisitions if the cost of capital improves [50] Question: What is the context behind the new mortgage loan receivables on the balance sheet? - The company made two loans on assets sold, achieving a good yield with an interest rate of about 8% [58] Question: Why expand the top tenant list to 60? - Management emphasized transparency and the quality of the tenant mix, which supports investor confidence [60]
FrontView REIT, Inc.(FVR) - 2025 Q2 - Earnings Call Transcript