Financial Data and Key Metrics Changes - First quarter 2024 FFO was $0.41 per share, a $0.05 per share or 13.9% increase over the first quarter of 2023 [3] - First quarter 2024 AFFO was $0.42 per share, a $0.06 per share increase or 16.7% increase over the first quarter of 2023 [3] - G&A as a percentage of revenues in the first quarter was 12.4%, a year-over-year decrease of nearly 121 basis points [15] - The company maintained full-year FFO and AFFO guidance of $1.51 to $1.56 per share, and $1.53 to $1.58 per share, respectively [4] Business Line Data and Key Metrics Changes - The portfolio was 99% occupied and consisted of 138 properties totaling 3.8 million square feet, with tenants operating in 23 sectors within 35 states [13] - Total revenues increased by 11.7%, primarily driven by interest income generated by the loan portfolio [61] - The company ended the quarter with 65% of total annualized base rents coming from tenants with an investment-grade credit rating, an increase of 700 basis points from the previous year [92] Market Data and Key Metrics Changes - The company originated a $7.2 million first mortgage loan investment, with $3.6 million funded during the quarter [91] - The current stock price is approximately $15 per share, implying a cap rate of over 8.5% and a current dividend yield of over 7.25% [92] Company Strategy and Development Direction - The company is focused on a unique asset recycling strategy, ample liquidity, and a de-risked balance sheet to drive long-term value [5] - The acquisition market is currently quiet, but the company anticipates more productive opportunities as the market adjusts to higher interest rates [73] - The company is actively pursuing high-yielding and better risk-adjusted loan opportunities [73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing 2024 guidance and positioning for future earnings growth in 2025 [5] - The company is optimistic about the ability to hit acquisition targets and is seeing more movement in the market for properties they wish to sell [78] - Management noted that the reluctance of sellers is impacting the acquisition market, but they expect this to change as rates stabilize [73] Other Important Information - The company repurchased over 45,000 shares of common stock for a total cost of $800,000 at an average price of $16.90 per share [75] - The company has no debt maturity until 2026, with total liquidity at quarter-end of $185 million [94] Q&A Session Summary Question: Upcoming rental rate increases and lease turnovers - Management indicated minimal lease turnover this year, with a general expectation of about a 1% annual rent escalation across the portfolio [63] Question: Acquisition versus disposition spread - Management noted that they are looking to sell non-investment grade properties and acquire investment-grade properties at similar or higher cap rates [66] Question: Market conditions for acquisitions - Management observed that the market for properties below $5 million remains productive, particularly in the 1031 exchange market [84] Question: Impact of higher rates on buyer funding for disposition assets - Management expressed surprise at the continued efficiency of the 1031 market for properties under $5 million, despite tighter funding conditions for larger assets [84] Question: Guidance assumptions for FFO - Management mentioned that increased asset sales could lead to a loss of income from loan investments, affecting guidance [79] Question: Loan exposure limits - Management stated that loan exposure is evaluated on a case-by-case basis, with no specific upper boundary currently set [83]
Alpine me Property Trust(PINE) - 2024 Q1 - Earnings Call Transcript