Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.31 for Q4 2025 and $1.25 for the full year, achieving the high end of guidance [31] - The annualized base rent at the end of the quarter was $62.9 million, reflecting a $1.6 million increase due to net acquisitions [26] - The annualized adjusted cash NOI was $61.3 million, representing a 96% margin on the in-place portfolio [27] Business Line Data and Key Metrics Changes - In Q4 2025, the company acquired seven properties for approximately $41.3 million at an average cap rate of 7.5% [8] - For the full year 2025, the company acquired 32 properties for approximately $124.1 million at an average cash cap rate of 7.74% [8] - The company sold 11 properties for $20.4 million in Q4 2025, with a median cap rate of 6.9% for the year [14][15] Market Data and Key Metrics Changes - The company’s portfolio occupancy approached 99%, with only four vacant assets at the end of the quarter [18] - The company has two tenants in bankruptcy, representing a combined 0.56% of ABR [18] Company Strategy and Development Direction - The company focuses on a real estate-first strategy, acquiring frontage-based assets in major retail nodes [4] - The management team emphasizes diversification across necessity and service-based industries to mitigate risks [6][7] - The company plans to continue optimizing its portfolio through strategic acquisitions and dispositions, with a target of $100 million in net acquisitions for 2026 [22][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s operational strength and financial resilience, stating it is better positioned than ever since going public [4] - The company expects to grow AFFO per share by 4% in 2026 at the midpoint of guidance, driven by improved capital deployment and portfolio performance [22][31] - Management noted that the acquisition market remains open, with expectations for cap rates to settle around 7.5% in Q1 2026 [13] Other Important Information - The company has enhanced its disclosures, providing detailed location data and traffic metrics for its properties [24] - The company’s tenant base remains diversified, with the top 10 tenants accounting for only 24% of ABR [6] Q&A Session Summary Question: Clarification on AFFO guidance - Management explained that the AFFO guidance range of $1.27-$1.32 depends on portfolio performance and the timing of acquisitions and dispositions [35][36] Question: Interest in the company given the discount to NAV - Management acknowledged the discount to NAV and noted that inbound interest has been quiet, but the quality of the portfolio is evident [38][39] Question: Incremental capital considerations - Management discussed the balance between AFFO yield and NAV, indicating that they are fully funded for 2026 and can execute their capital deployment strategy [42][43] Question: Acquisition pipeline and market conditions - Management indicated that the acquisition pipeline remains strong, with expectations for mid-7% cap rates and a fluid market environment [51][52] Question: Bad debt expectations - Management confirmed that they expect bad debt to be approximately 50 basis points in 2026, consistent with historical performance [57][58] Question: Rent catch-up benefits from lease renewals - Management confirmed that they expect to see rent increases from lease renewals, with historical recovery rates exceeding 105% [69][70]
FrontView REIT, Inc.(FVR) - 2025 Q4 - Earnings Call Transcript