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CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 2.02. Results of Operations and Financial Condition
On October 17, 2024, Alpine Income Property Trust, Inc., a Maryland corporation (the "Company"), issued an earnings press release and an investor presentation relating to the Company’s financial results for the quarter ended September 30, 2024. Copies of the press release and investor presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.
The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 7.01. Regulation FD Disclosure
On October 17, 2024, the Company issued an earnings press release and an investor presentation relating to the Company’s financial results for the quarter ended September 30, 2024. Copies of the press release and investor presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the materials include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.
The information in Item 7.01 of this Current Report, including Exhibits 99.1 and 99.2 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 Earnings Press Release dated October 17, 2024
99.2 Investor Presentation dated October 17, 2024
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 17, 2024
Alpine Income Property Trust, Inc.
By: /s/ Philip R. Mays
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Press Release
FOR IMMEDIATE RELEASE | ALPINE INCOME PROPERTY TRUST REPORTS THIRD QUARTER 2024 OPERATING RESULTS |
WINTER PARK, FL – October 17, 2024 – Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company” or “PINE”), an owner and operator of single tenant net leased commercial income properties, today announced its operating results and earnings for the quarter ended September 30, 2024.
Select Highlights
| ◾ | Net Income per diluted share attributable to the Company of $0.21. |
| ◾ | Funds from Operations (“FFO”) of $0.45 per diluted share, an increase of 21.6% from the comparable prior year period. |
| ◾ | Adjusted Funds from Operations (“AFFO”) of $0.44 per diluted share, an increase of 15.8% from the comparable prior year period. |
| ◾ | Raised net proceeds of $11.1 million under common stock ATM offering program. |
| ◾ | Acquired four net leased retail properties for $37.5 million, at a weighted average initial cash cap rate of 8.8%. |
| ◾ | Purchased and amended a first mortgage construction loan, secured by a Publix-anchored shopping center and three outparcels, with a total funding commitment of $17.8 million, of which $10.0 million was funded at closing, at an initial interest rate of 10.25%. |
| ◾ | Sold eight net leased retail properties, including two leased to Walgreens, for $48.6 million at a weighted average exit cash cap rate of 6.8%, generating aggregate gains of $3.4 million. |
| ◾ | Increased the weighted average remaining lease term of the property portfolio to 8.8 years as of September 30, 2024, from 6.6 years as of June 30, 2024. |
| ◾ | Increased quarterly dividend from $0.275 per share to $0.28 per share, representing an annualized yield of 6.3% based on the closing price of the Company’s common stock on October 16, 2024. |
| ◾ | Raised full year 2024 FFO guidance to a range of $1.67 to $1.69 per diluted share. |
| ◾ | Raised full year 2024 AFFO guidance to a range of $1.69 to $1.71 per diluted share. |
“We are pleased to have robust growth in earnings and investments this quarter, while continuing to selectively prune the portfolio by selling lower yielding assets and recycling the proceeds into higher yield assets,” said John P. Albright, President and Chief Executive Officer of Alpine Income Property Trust. “Our strategy has again enabled us to raise our earnings and investment guidance for the balance of 2024 while incrementally decreasing leverage.”
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Quarterly Operating Results Highlights
The table below provides a summary of the Company’s operating results for the quarter ended September 30, 2024 (in thousands, except per share data):
| | Three Months Ended | | | |||||||
| | September 30, 2024 | | September 30, 2023 | | $ Variance | | % Variance | |||
Total Revenues | | $ | 13,480 | | $ | 11,559 | | $ | 1,921 | | 16.6% |
Net Income (Loss) | | $ | 3,354 | | $ | (939) | | $ | 4,293 | | 457.2% |
Net Income (Loss) Attributable to PINE | | $ | 3,080 | | $ | (837) | | $ | 3,917 | | 468.0% |
Net Income (Loss) per Diluted Share Attributable to PINE | | $ | 0.21 | | $ | (0.05) | | $ | 0.26 | | 520.0% |
FFO (1) | | $ | 6,690 | | $ | 5,867 | | $ | 823 | | 14.0% |
FFO per Diluted Share (1) | | $ | 0.45 | | $ | 0.37 | | $ | 0.08 | | 21.6% |
AFFO (1) | | $ | 6,649 | | $ | 5,932 | | $ | 717 | | 12.1% |
AFFO per Diluted Share (1) | | $ | 0.44 | | $ | 0.38 | | $ | 0.06 | | 15.8% |
Dividends Declared and Paid, per Share | | $ | 0.280 | | $ | 0.275 | | $ | 0.005 | | 1.8% |
See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO, and AFFO per diluted share. |
Year-to-Date Operating Results Highlights
The table below provides a summary of the Company’s operating results for the nine months ended September 30, 2024 (in thousands, except per share data):
| | Nine Months Ended | | | |||||||
| | September 30, 2024 | | September 30, 2023 | | $ Variance | | % Variance | |||
Total Revenues | | $ | 38,436 | | $ | 34,063 | | $ | 4,373 | | 12.8% |
Net Income | | $ | 3,293 | | $ | 2,896 | | $ | 397 | | 13.7% |
Net Income Attributable to PINE | | $ | 3,024 | | $ | 2,582 | | $ | 442 | | 17.1% |
Net Income per Diluted Share Attributable to PINE | | $ | 0.20 | | $ | 0.16 | | $ | 0.04 | | 25.0% |
FFO (1) | | $ | 19,133 | | $ | 17,264 | | $ | 1,869 | | 10.8% |
FFO per Diluted Share (1) | | $ | 1.29 | | $ | 1.10 | | $ | 0.19 | | 17.3% |
AFFO (1) | | $ | 19,291 | | $ | 17,410 | | $ | 1,881 | | 10.8% |
AFFO per Diluted Share (1) | | $ | 1.30 | | $ | 1.11 | | $ | 0.19 | | 17.1% |
Dividends Declared and Paid, per Share | | $ | 0.830 | | $ | 0.825 | | $ | 0.005 | | 0.6% |
(1) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income (Loss) to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO, and AFFO per diluted share. |
Investments
During the three months ended September 30, 2024, the Company acquired four net leased retail properties leased to two tenants for $37.5 million at a weighted average initial cap rate of 8.8%. One property was acquired for $6.1 million and is leased to investment grade rated Golf Galaxy (Dick’s Sporting Goods). The other three properties, all located in the greater Tampa Bay, Florida area, were purchased through a sale-leaseback transaction with a subsidiary of Beachside Hospitality Group for $31.4 million and have leases with a 30-year term and 2.0% annual escalations (the “Tampa Properties”). The Tampa Properties are adequately insured; accordingly, the Company expects no material impact on cash flows from rental payments from these tenants as a result of the recent storms in the greater Tampa Bay area.
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During the three months ended September 30, 2024, the Company purchased and amended one first mortgage construction loan, secured by a Publix-anchored shopping center and three outparcels located in Charlotte, North Carolina. The loan has a total funding commitment of $17.8 million, of which $10.0 million was funded during the quarter ended September 30, 2024, an initial yield of 10.25%, and a term of one year. The rate of the loan increases by 0.25% every 30 days to a maximum rate of 11.00%. However, upon certain leasing criteria being met, the rate will be lowered to 9.50%.
During the three months ended September 30, 2024, investment activities, which include the Company’s property and structured investment portfolios, totaled $55.3 million at a weighted average yield of 9.2%.
During the nine months ended September 30, 2024, investment activities, which include the Company’s property and structured investment portfolios, totaled $84.2 million at a weighted average yield of 9.4%.
Dispositions
During the three months ended September 30, 2024, the Company sold eight net lease properties leased to Walgreens (two), LA Fitness, Hobby Lobby, Lowes Home Improvement, Chick-fil-A, Tractor Supply, and Long John Silvers, for total disposition volume of $48.6 million at a weighted average exit cash cap rate of 6.8%. The sale of the properties generated aggregate gains of $3.4 million.
During the three months ended September 30, 2024, disposition activities, which include the Company’s property and structured investment portfolios, totaled $48.6 million at a weighted average exit cash cap rate of 6.8%.
During the nine months ended September 30, 2024, disposition activities, which include the Company’s property and structured investment portfolios, totaled $68.8 million at a weighted average exit cash cap rate of 7.0%.
Property Portfolio
The Company’s property portfolio (1) consisted of the following as of September 30, 2024:
Number of Properties | | 133 |
Square Feet | | 3.6 million |
Annualized Base Rent | | $41.5 million |
Weighted Average Remaining Lease Term (2) | | 8.8 years |
States where Properties are Located | | 34 |
Occupancy | | 99.1% |
| | |
% of Annualized Base Rent Attributable to Investment Grade Rated Tenants (3)(4) | | 52% |
% of Annualized Base Rent Attributable to Credit Rated Tenants (3)(5) | | 83% |
Any differences are a result of rounding.
| (1) | For GAAP purposes, the Tampa Properties are accounted for as a financing arrangement and, as such, the related assets and corresponding revenue are included in the Company’s commercial loans and investments on its consolidated balance sheets and consolidated statements of operations. However, for purposes of describing our property portfolio, including for tenant, industry, and state concentrations, the Company includes the Tampa Properties, as they constitute real estate assets for both legal and tax purposes. |
| (2) | Calculation of weighted average remaining lease term does not assume exercise of any tenant purchase options. |
| (3) | Annualized Base Rent (“ABR”) represents the annualized in-place straight-line base rent required by the tenant’s lease. ABR is a non-GAAP financial measure. We believe this non-GAAP financial measure is useful to investors because it is a widely accepted industry measure used by analysts and investors to compare the real estate portfolios and operating performance of REITs. |
| (4) | The Company defines an Investment Grade Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and Moody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. |
| (5) | The Company defines a Credit Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners. |
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The Company’s property portfolio included the following top tenants that represent 2.0% or greater of the Company's total ABR as of September 30, 2024:
Tenant | | Credit Rating (1) | | % of Annualized Base Rent |
Dicks Sporting Goods | | BBB / Baa2 | | 11% |
Walgreens | | BB / Ba1 | | 9% |
Beachside Hospitality Group | | NR / NR | | 9% |
Dollar Tree/Family Dollar | | BBB / Baa2 | | 8% |
Lowe's | | BBB+ / Baa1 | | 7% |
Best Buy | | BBB+ / A3 | | 5% |
Dollar General | | BBB / Baa2 | | 5% |
Walmart | | AA / Aa2 | | 4% |
At Home | | CCC / Caa3 | | 3% |
Bass Pro Shops | | BB / Ba3 | | 3% |
Home Depot | | A / A2 | | 3% |
Kohl's | | BB / Ba2 | | 2% |
Burlington | | BB+ / Ba1 | | 2% |
Other | | | | 26% |
Total | | | | 100% |
Any differences are a result of rounding.
(1) | Credit Rating is the available rating from S&P Global Ratings and/or Moody’s Investors Service, as applicable, as of September 30, 2024. |
The Company’s property portfolio consisted of the following industries as of September 30, 2024:
Industry | | % of Annualized Base Rent |
Sporting Goods | | 17% |
Dollar Stores | | 13% |
Home Improvement | | 11% |
Pharmacy | | 10% |
Casual Dining | | 10% |
Home Furnishings | | 7% |
Consumer Electronics | | 7% |
Grocery | | 4% |
Entertainment | | 4% |
Off-Price Retail | | 4% |
General Merchandise | | 3% |
Automotive Parts | | 2% |
Convenience Store | | 2% |
Office Supplies | | 1% |
Health & Fitness | | 1% |
Specialty Retail | | 1% |
Farm & Rural Supply | | 1% |
Quick Service Restaurant | | 1% |
Pet Supplies | | < 1% |
Other (1) | | < 1% |
Total - 23 Industries | | 100% |
Any differences are a result of rounding.
(1) | Includes four industries collectively representing less than 1% of the Company’s ABR as of September 30, 2024. |
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The Company’s property portfolio included properties in the following states as of September 30, 2024:
State | | % of Annualized Base Rent |
New Jersey | | 11% |
Florida | | 11% |
New York | | 8% |
Illinois | | 7% |
Michigan | | 7% |
Texas | | 7% |
Ohio | | 7% |
Georgia | | 4% |
Minnesota | | 4% |
West Virginia | | 3% |
Alabama | | 2% |
Kansas | | 2% |
Arizona | | 2% |
Louisiana | | 2% |
Massachusetts | | 2% |
Missouri | | 2% |
Maryland | | 2% |
Nevada | | 2% |
Wisconsin | | 2% |
South Carolina | | 2% |
Pennsylvania | | 1% |
Virginia | | 1% |
Arkansas | | 1% |
Connecticut | | 1% |
New Mexico | | 1% |
Indiana | | 1% |
Nebraska | | 1% |
Oklahoma | | 1% |
Maine | | 1% |
North Carolina | | 1% |
Washington | | 1% |
Mississippi | | < 1% |
California | | < 1% |
Kentucky | | < 1% |
Total | | 100% |
Any differences are a result of rounding.
Capital Markets and Balance Sheet
During the quarter ended September 30, 2024, the Company completed the following notable capital markets activity:
| ◾ | Issued 620,176 common shares under its ATM offering program at a weighted average gross price of $18.09 per share, for total net proceeds of $11.1 million. |
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The following table provides a summary of the Company’s long-term debt as of September 30, 2024:
| | Face Value Debt | | Stated Interest Rate | | Wtd. Avg. Rate as of September 30, 2024 | | Maturity Date | |
Credit Facility (1) | | $ | 79,500 | | SOFR + 0.10% + | | 5.31% | | January 2027 |
2026 Term Loan (2) | | | 100,000 | | SOFR + 0.10% + | | 3.50% | | May 2026 |
2027 Term Loan (3) | | | 100,000 | | SOFR + 0.10% + | | 2.58% | | January 2027 |
Total Debt/Weighted-Average Rate | | $ | 279,500 | | | | 3.68% | | |
(1) | As of September 30, 2024, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 3.21% plus the SOFR adjustment of 0.10% and the applicable spread on $50 million of the outstanding balance on the Company’s Revolving Credit Facility. |
(2) | As of September 30, 2024, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 2.05% plus the SOFR adjustment of 0.10% and the applicable spread for the $100 million 2026 Term Loan balance. |
(3) | As of September 30, 2024, the Company has utilized interest rate swaps to fix SOFR and achieve a weighted average fixed interest rate of 1.18% plus the SOFR adjustment of 0.10% and the applicable spread for the $100 million 2027 Term Loan balance. On November 29, 2024, certain swaps will expire and be replaced; as a result, the weighted average fixed interest rate will increase from 1.18% to 2.05% plus the SOFR adjustment of 0.10% and the applicable spread. |
The Credit Facility has commitments for up to $250.0 million, however, borrowing availability is based on unencumbered property adjusted net operating income, as defined in the underlying credit agreement. As of September 30, 2024, the Company had an outstanding balance of $79.5 million and $53.5 million available.
As of September 30, 2024, the Company’s net debt to Pro Forma Adjusted EBITDA was 6.9 times, and as defined in the Company’s credit agreement, the Company’s fixed charge coverage ratio was 3.4 times. As of September 30, 2024, the Company’s net debt to total enterprise value was 47.9%. The Company calculates total enterprise value as the sum of net debt and the market value of the Company's outstanding common shares and OP Units, as if the OP Units have been redeemed for common shares.
As of September 30, 2024, the Company held a 92.1% interest in Alpine Income Property OP, LP, the Company’s operating partnership (the “Operating Partnership” or “OP”). There were 1,223,854 OP Units held by third parties outstanding and 14,251,933 shares of the Company’s common stock outstanding, for total outstanding common stock and OP Units held by third parties of 15,475,787 as of September 30, 2024.
Dividend
On August 20, 2024, the Company announced a cash dividend for the third quarter of 2024 of $0.280 per share, payable on September 30, 2024 to stockholders of record as of the close of business on September 12, 2024. The third quarter 2024 cash dividend represents a payout ratio of 63.6% of the Company’s third quarter 2024 FFO per diluted share and AFFO per diluted share.
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2024 Outlook
The Company is increasing its FFO, AFFO, and investments outlook for 2024 to take into account its year-to-date performance. The Company’s outlook for 2024 assumes continued stability in economic activity, stable or positive business trends related to each of our tenants, and other significant assumptions.
The Company’s revised outlook for 2024 is as follows:
| | Revised Outlook Range for 2024 | | Change from Prior Outlook | ||||
(Unaudited) | | Low | | High | | Low | | High |
Investments | | $100 million | to | $110 million | | $50 million | to | $30 million |
Dispositions | | $70 million | to | $75 million | | $20 million | to | $(5) million |
FFO per Diluted Share | | $1.67 | to | $1.69 | | $0.09 | to | $0.07 |
AFFO per Diluted Share | | $1.69 | to | $1.71 | | $0.09 | to | $0.07 |
Weighted Average Diluted Shares Outstanding | | 15.1 million | to | 15.1 million | | 0.2 million | to | 0.2 million |
The following table provides a reconciliation of the revised outlook range of the Company’s 2024 estimated Net Income per Diluted Share to estimated FFO and AFFO per Diluted Share:
| | Revised Outlook Range for 2024 | ||||
(Unaudited) | | Low | | High | ||
Net Income per Diluted Share | | $ | 0.20 | | $ | 0.22 |
Depreciation and Amortization | | | 1.69 | | | 1.69 |
Provision for Impairment (1) | | | 0.07 | | | 0.07 |
Gain on Disposition of Assets (1) | | | (0.29) | | | (0.29) |
FFO per Diluted Share | | $ | 1.67 | | $ | 1.69 |
Adjustments: | | | | | | |
Amortization of Intangible Assets and Liabilities to Lease Income | | | (0.03) | | | (0.03) |
Straight-Line Rent Adjustment | | | (0.03) | | | (0.03) |
Non-Cash Compensation | | | 0.02 | | | 0.02 |
Amortization of Deferred Financing Costs to Interest Expense | | | 0.05 | | | 0.05 |
Other Non-Cash Adjustments | | | 0.01 | | | 0.01 |
AFFO per Diluted Share | | $ | 1.69 | | $ | 1.71 |
(1) | Provision for Impairment and Gain on Disposition of Assets represents the actual adjustment for the nine months ended September 30, 2024. The Company’s revised outlook excludes projections related to these measures. |
Third Quarter 2024 Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter ended September 30, 2024, on Friday, October 18, 2024, at 9:00 AM ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.alpinereit.com or at the link provided in the event details below. To access the call by phone, please go to the link provided in the event details below and you will be provided with dial-in details.
Webcast:https://edge.media-server.com/mmc/p/v8ugyxn3
Dial-In:https://register.vevent.com/register/BI9e749ff3c69349f6b8f82ed6ff6377d5
We encourage participants to dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.alpinereit.com.
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About Alpine Income Property Trust, Inc.
Alpine Income Property Trust, Inc. (NYSE: PINE) is a publicly traded real estate investment trust that seeks to deliver attractive risk-adjusted returns and dependable cash dividends by investing in, owning and operating a portfolio of single tenant net leased commercial income properties that are predominately leased to high-quality publicly traded and credit-rated tenants.
We encourage you to review our most recent investor presentation which is available on our website at http://www.alpinereit.com.
Contact:Philip R. Mays
Senior Vice President, Chief Financial Officer and Treasurer
(407) 904-3324
pmays@alpinereit.com
Safe Harbor
This press release may contain “forward-looking statements.” Forward-looking statements include statements that may be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include general business and economic conditions, continued volatility and uncertainty in the credit markets and broader financial markets, risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, credit risk associated with the Company investing in first mortgage investments, illiquidity of real estate investments and potential damages from natural disasters, the impact of epidemics or pandemics (such as the COVID-19 Pandemic and its variants) on the Company’s business and the business of its tenants and the impact of such epidemics or pandemics on the U.S. economy and market conditions generally, other factors affecting the Company’s business or the business of its tenants that are beyond the control of the Company or its tenants, and the factors set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other risks and uncertainties discussed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Non-GAAP Financial Measures
Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”) Adjusted Funds From Operations (“AFFO”), and Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma Adjusted EBITDA”), all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO, AFFO, and Pro Forma Adjusted EBITDA do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of
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cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries.
To derive AFFO, we further modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as loss on extinguishment of debt, amortization of above- and below-market lease related intangibles, straight-line rental revenue, amortization of deferred financing costs, non-cash compensation, and other non-cash income or expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
To derive Pro Forma Adjusted EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination and/or payoff, and real estate related depreciation and amortization including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, loss on extinguishment of debt, above- and below-market lease related intangibles, non-cash compensation, other non-cash income or expense, and other non-recurring items such as disposition management fees and commission fees. Cash interest expense is also excluded from Pro Forma Adjusted EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma Adjusted EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. FFO, AFFO, and Pro Forma Adjusted EBITDA may not be comparable to similarly titled measures employed by other companies.
Page 9
Alpine Income Property Trust, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| As of | ||||
| September 30, 2024 (Unaudited) |
| December 31, 2023 | ||
ASSETS | | | | ||
Real Estate: | | | | | |
Land, at Cost | $ | 132,433 | | $ | 149,314 |
Building and Improvements, at Cost | | 317,260 | | | 328,993 |
Total Real Estate, at Cost | | 449,693 | | | 478,307 |
Less, Accumulated Depreciation | | (42,302) | | | (34,714) |
Real Estate—Net | | 407,391 | | | 443,593 |
Assets Held for Sale | | 4,100 | | | 4,410 |
Commercial Loans and Investments | | 86,549 | | | 35,080 |
Cash and Cash Equivalents | | 2,560 | | | 4,019 |
Restricted Cash | | 25,495 | | | 9,712 |
Intangible Lease Assets—Net | | 40,574 | | | 49,292 |
Straight-Line Rent Adjustment | | 1,366 | | | 1,409 |
Other Assets | | 10,951 | | | 17,045 |
Total Assets | $ | 578,986 | | $ | 564,560 |
LIABILITIES AND EQUITY | | | | | |
Liabilities: | | | | | |
Accounts Payable, Accrued Expenses, and Other Liabilities | $ | 7,279 | | $ | 5,736 |
Prepaid Rent and Deferred Revenue | | 3,319 | | | 2,627 |
Intangible Lease Liabilities—Net | | 4,358 | | | 4,907 |
Obligation Under Participation Agreement | | 13,178 | | | — |
Long-Term Debt | | 278,898 | | | 275,677 |
Total Liabilities | | 307,032 | | | 288,947 |
Commitments and Contingencies | | | | | |
Equity: | | | | | |
Preferred Stock, $0.01 par value per share, 100 million shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023 | | — | | | — |
Common Stock, $0.01 par value per share, 500 million shares authorized, 14,251,933 shares issued and outstanding as of September 30, 2024 and 13,659,207 shares issued and outstanding as of December 31, 2023 | | 143 | | | 137 |
Additional Paid-in Capital | | 254,110 | | | 243,690 |
Dividends in Excess of Net Income | | (10,652) | | | (2,359) |
Accumulated Other Comprehensive Income | | 4,641 | | | 9,275 |
Stockholders' Equity | | 248,242 | | | 250,743 |
Noncontrolling Interest | | 23,712 | | | 24,870 |
Total Equity | | 271,954 | | | 275,613 |
Total Liabilities and Equity | $ | 578,986 | | $ | 564,560 |
Page 10
Alpine Income Property Trust, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share, per share and dividend data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | ||||
Revenues: | | | | | | | | | | | | |
Lease Income | | $ | 11,718 | | $ | 11,447 | | $ | 34,512 | | $ | 33,951 |
Interest Income from Commercial Loans and Investments | | | 1,663 | | | 112 | | | 3,552 | | | 112 |
Other Revenue | | | 99 | | | — | | | 372 | | | — |
Total Revenues | | | 13,480 | | | 11,559 | | | 38,436 | | | 34,063 |
Operating Expenses: | | | | | | | | | | | | |
Real Estate Expenses | | | 1,841 | | | 1,722 | | | 5,569 | | | 4,731 |
General and Administrative Expenses | | | 1,843 | | | 1,652 | | | 4,987 | | | 4,823 |
Provision for Impairment | | | 422 | | | 2,864 | | | 1,110 | | | 2,864 |
Depreciation and Amortization | | | 6,340 | | | 6,528 | | | 19,074 | | | 19,286 |
Total Operating Expenses | | | 10,446 | | | 12,766 | | | 30,740 | | | 31,704 |
Gain on Disposition of Assets | | | 3,426 | | | 2,586 | | | 4,344 | | | 7,782 |
Gain on Extinguishment of Debt | | | — | | | — | | | — | | | 23 |
Net Income From Operations | | | 6,460 | | | 1,379 | | | 12,040 | | | 10,164 |
Investment and Other Income | | | 61 | | | 125 | | | 186 | | | 226 |
Interest Expense | | | (3,167) | | | (2,443) | | | (8,933) | | | (7,494) |
Net Income (Loss) | | | 3,354 | | | (939) | | | 3,293 | | | 2,896 |
Less: Net (Income) Loss Attributable to Noncontrolling Interest | | | (274) | | | 102 | | | (269) | | | (314) |
Net Income (Loss) Attributable to Alpine Income Property Trust, Inc. | | $ | 3,080 | | $ | (837) | | $ | 3,024 | | $ | 2,582 |
| | | | | | | | | | | | |
Per Common Share Data: | | | | | | | | | | | | |
Net Income (Loss) Attributable to Alpine Income Property Trust, Inc. | | | | | | | | | | | | |
Basic | | $ | 0.22 | | $ | (0.06) | | $ | 0.22 | | $ | 0.18 |
Diluted | | $ | 0.21 | | $ | (0.05) | | $ | 0.20 | | $ | 0.16 |
| | | | | | | | | | | | |
Weighted Average Number of Common Shares: | | | | | | | | | | | | |
Basic | | | 13,744,232 | | | 13,946,194 | | | 13,663,752 | | | 14,001,774 |
Diluted (1) | | | 14,968,086 | | | 15,649,688 | | | 14,887,606 | | | 15,705,268 |
| | | | | | | | | | | | |
Dividends Declared and Paid | | $ | 0.280 | | $ | 0.275 | | $ | 0.830 | | $ | 0.825 |
(1) | Includes the weighted average of 1,223,854 shares during the three and nine months ended September 30, 2024 and 1,703,494 shares during the three and nine months ended September 30, 2023, in each case, underlying OP Units including (i) 1,223,854 shares underlying OP Units issued to CTO Realty Growth, Inc. and (ii) 479,640 shares underlying OP Units issued to an unrelated third party, which OP Units were redeemed by PINE for an equivalent number of shares of common stock of PINE during the three months ended December 31, 2023. |
Page 11
Alpine Income Property Trust, Inc.
Non-GAAP Financial Measures
Funds From Operations and Adjusted Funds From Operations
(Unaudited)
(In thousands, except per share data)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 | ||||
Net Income (Loss) | | $ | 3,354 | | $ | (939) | | $ | 3,293 | | $ | 2,896 |
Depreciation and Amortization | | | 6,340 | | | 6,528 | | | 19,074 | | | 19,286 |
Provision for Impairment | | | 422 | | | 2,864 | | | 1,110 | | | 2,864 |
Gain on Disposition of Assets | | | (3,426) | | | (2,586) | | | (4,344) | | | (7,782) |
Funds From Operations | | $ | 6,690 | | $ | 5,867 | | $ | 19,133 | | $ | 17,264 |
Adjustments: | | | | | | | | | | | | |
Gain on Extinguishment of Debt | | | — | | | — | | | — | | | (23) |
Amortization of Intangible Assets and Liabilities to Lease Income | | | (136) | | | (110) | | | (361) | | | (299) |
Straight-Line Rent Adjustment | | | (216) | | | (112) | | | (370) | | | (386) |
Non-Cash Compensation | | | 79 | | | 79 | | | 238 | | | 238 |
Amortization of Deferred Financing Costs to Interest Expense | | | 180 | | | 179 | | | 540 | | | 530 |
Other Non-Cash Adjustments | | | 52 | | | 29 | | | 111 | | | 86 |
Adjusted Funds From Operations | | $ | 6,649 | | $ | 5,932 | | $ | 19,291 | | $ | 17,410 |
| | | | | | | | | | | | |
FFO per Diluted Share | | $ | 0.45 | | $ | 0.37 | | $ | 1.29 | | $ | 1.10 |
AFFO per Diluted Share | | $ | 0.44 | | $ | 0.38 | | $ | 1.30 | | $ | 1.11 |
Page 12
Alpine Income Property Trust, Inc.
Non-GAAP Financial Measures
Reconciliation of Net Debt to Pro Forma Adjusted EBITDA
(Unaudited)
(In thousands)
| | Three Months Ended | | |
| | September 30, 2024 | | |
Net Income | | $ | 3,354 | |
Adjustments: | | | | |
Depreciation and Amortization | | | 6,340 | |
Provision for Impairment | | | 422 | |
Gain on Disposition of Assets | | | (3,426) | |
Amortization of Intangible Assets and Liabilities to Lease Income | | | (136) | |
Straight-Line Rent Adjustment | | | (216) | |
Non-Cash Compensation | | | 79 | |
Amortization of Deferred Financing Costs to Interest Expense | | | 180 | |
Other Non-Cash Adjustments | | | 52 | |
Other Non-Recurring Items | | | (26) | |
Interest Expense, Net of Deferred Financing Costs Amortization and Interest on Obligation Under Participation Agreement | | | 2,712 | |
Adjusted EBITDA | | $ | 9,335 | |
| | | | |
Annualized Adjusted EBITDA | | $ | 37,340 | |
Pro Forma Annualized Impact of Current Quarter Investment Activity (1) | | | (233) | |
Pro Forma Adjusted EBITDA | | $ | 37,107 | |
| | | | |
Total Long-Term Debt | | $ | 278,898 | |
Financing Costs, Net of Accumulated Amortization | | | 602 | |
Cash and Cash Equivalents | | | (2,560) | |
Restricted Cash | | | (22,365) | |
Net Debt | | $ | 254,575 | |
| | | | |
Net Debt to Pro Forma Adjusted EBITDA | | | 6.9 | x |
(1) | Reflects the pro forma annualized impact on Annualized Adjusted EBITDA of the Company’s investments and disposition activity during the three months ended September 30, 2024. |
Page 13
| Lowes Katy TX Third Quarter 2024 Investor Presentation |
| 2 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Company Profile Ticker Symbol (NYSE) PINE Stock Price (as of 9/30/2024) $18.20 Equity Market Capitalization $277M Total Enterprise Value (TEV) $531M TEV Per Square Foot $150 Implied Cap Rate 8% Net Debt to TEV1 48% Annualized Dividend Yield 6.2% Common Shares & OP Units Outstanding3 15.5M Book Value Per Share $17.76 Number of Net Lease Properties 133 Number of States with a Property 34 Total Portfolio Square Feet 3.6M Current Occupancy 99% % of ABR from Investment Grade-Rated Tenants2 52% 5-mile Weighted Average Household Income $106,000 5-mile Weighted Average Total Population 128,000 Average Rent PSF4 $11.67 Weighted Average Lease Term5 8.8 Years As of September 30, 2024, unless otherwise noted. 1. Net debt to Total Enterprise Value is the Company’s outstanding debt, minus the Company’s cash and cash equivalents, as a percentage of the Company’s enterprise value. 2. A credit rated, or investment grade rated tenant (rating of BBB-, Baa3 or NAIC-2 or higher) is a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners (NAIC). 3. As of September 30, 2024; includes 1,223,854 OP Units held by third parties in Alpine Income Property OP, LP, the Company’s operating partnership (the “Operating Partnership” or “OP”). 4. Annualized Base Rent (“ABR”) represents the annualized in-place straight-line base rent required by the tenant’s lease. 5. Calculation of weighted average remaining lease term does not assume exercise of any tenant purchase options. 6. Three properties, which were acquired in the third quarter of 2024, all located in the greater Tampa Bay, Florida area, (the “Tampa Properties”) were purchased through a sale-leaseback transaction that includes a tenant repurchase option are, for GAAP purposes, accounted for as a financing arrangement and, as such, the related assets and corresponding revenue are included in the Company’s commercial loans and investments on its consolidated balance sheets and consolidated statements of operations. However, as the Tampa Properties constitute real estate assets for both legal and tax purposes, we include the Tampa Properties in the property portfolio when describing our property portfolio and for purposes of providing statistics related thereto. Value + Income High-Quality, 100% Retail Net Lease Portfolio6 |
| 3 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com 3 4 2 Active Asset Management ▪ Successfully reducing Walgreens exposure ▪ Sold two Walgreens, decreasing Walgreens to second largest tenant at 9% of total ABR and expect Walgreens to soon decrease further Increased portfolio weighted-average lease term (WALT) ▪ Increased to 8.8 years from 6.6 years at the end of the prior quarter Strong free cash flow generation to support dividend and reinvest in growth ▪ AFFO payout ratio is a conservative 64% 1 Organic growth through accretive asset recycling by selling smaller lower yielding assets and acquiring at higher yields ▪ Sold eight properties for a total of $48.6 million at a weighted-average cap rate of 6.8% ▪ Acquired four properties for a total of $37.5 million at a weighted cap rate of 8.8% Highlights Third Quarter 2024 Investing in select higher-yielding loans secured by high-quality real estate ▪ Originated a $17.8 million first mortgage construction loan, of which $10.0 million was funded in the third quarter, secured by a Publix-anchored shopping center and three out parcels, with an initial yielding 10.25% Opportunistically raised capital and lowered leverage ▪ Issued approximately 620,000 common shares under ATM program for net proceeds of $11.1 million ▪ Leverage improved to 53% from 48% of TEV 5 6 |
| 4 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com 14.1% 7.4% 3.9% 3.9% 3.3% 2.9% 2.7% 10.3x 18.5x 12.3x 17.9x 14.8x 16.5x 14.3x PINE EPRT NTST ADC O FCPT NNN 2024E AFFO Growth 2024E AFFO Growth 2024E AFFO Multiple Strong Earnings Growth at Lowest Price Multiple 1. 2024E AFFO per share growth and 2024E AFFO multiples are based on the KeyBank Weekly Leaderboard report dated 10/4/2024. 2024E AFFO per share for PINE reflects the midpoint of guidance provided on October 17, 2024. 2024E AFFO Multiple Peer Average 15.7x 2023 AFFO Actuals to 2024 AFFO Estimates Growth & 2024E AFFO Multiples 2024E AFFO Multiples |
| 5 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Margin of Safety: Portfolio TEV Basis at Discount to Replacement Cost, and Closer to Land Value than Peers High-Quality Portfolio with Valuation Upside ▪ Total enterprise value (TEV) is $150 per square foot, allowing shareholders to invest below replacement cost. Better Margin of Safety with Stickier Tenants ▪ Average cash rent per square foot of $11.67 ▪ Occupancy costs for tenants meaningfully below market rents given the inflationary pressure on building and land costs ▪ Tenants may be more likely to exercise their renewal options at expiration 1. Total Enterprise Value for each peer net lease company is from the Stifel Triple-Net REITs Comp Sheets 10/5/2024 report. 2. Portfolio size is based on total square feet and is from available information published on each company’s website, as of October 10, 2024. Portfolio information for PINE is as of September 30, 2024. TEV1 Per Square Foot2 $500 $378 $368 $239 $225 $166 $150 FCPT EPRT NNN O ADC NTST PINE Peer Average $313 |
| 6 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com 18.1x 17.0x 17.2x 14.6x 14.4x 12.8x 10.8x ADC EPRT FCPT O NNN NTST PINE Large Valuation Discount with Strong Investment Grade Credit Profile 2024E FFO Multiple 1 Company’s multiple at a meaningful discount to the investment grade-focused peer group average, implying significant valuation upside Investment Grade-Focused Peer Average 15.4x 1. 2024E FFO multiples are based on the closing stock price on September 30, 2024, using 2024E FFO per share estimates for the peer net lease companies from the KeyBank Weekly Leaderboard report dated 10/4/2024 report. 2024E FFO per share for PINE reflects the midpoint of guidance provided on October 17, 2024. 2. Percentage of rents associated with investment grade-rated tenants based on published information available through each company’s website as of October 10, 2024. IG RATED Disclosed % of Rents from Investment Grade-Rated Tenants2 68% 57% 17% 52% Not Disclosed 36% 83% |
| 7 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com High Yield from In-Place Dividend 1. All dividend yields and payout ratios are based on the closing stock price on September 30, 2024, using current annualized dividends and 2024E FFO per share estimates for the peer net lease companies from the Stifel Triple-Net REITs Comp Sheets 10/5/2024 report. 2024E FFO per share for PINE reflects the midpoint of guidance provided on October 17, 2024. 6.2% 5.1% 5.0% 4.8% 4.7% 4.0% 3.4% PINE NTST O NNN FCPT ADC EPRT Dividend Yield Peer Average 4.5% Portfolio built with an intense focus on real estate fundamentals, high-quality tenancy and long-term stability resulting in strong dividend coverage with conservative payout ratio 67% 69% 74% 70% 83% 73% 61% FFO Payout Ratio |
| 8 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Record of Growth, Diversification and Higher Quality Portfolio 2019 (IPO) Number of Net Lease Properties 20 133 Number of States with a Property 12 34 Total Portfolio Square Feet 0.9M 3.6M Annualized Base Rent (ABR) $13.3M $41.5M Top Tenant as a % of ABR 21% Wells Fargo (S&P: A+) 11% Dicks (S&P: BBB) Top Sector as a % of ABR 21% Financial Services 17% Sporting Goods Top State as a % of ABR 26% Florida 11% New Jersey % of ABR from IG Rated Tenants 36% 52% % of ABR from Credit Rated Tenants 89% 83% 2024 |
| 9 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Strong Investment Grade-Representation at 52% of ABR Credit Rating BBB 11% BB 9% NR 9% BBB 8% BBB+ 7% BBB+ 5% BBB 5% AA 4% CCC 3% BB 3% 36% 100% ABR % Other 2% 4% 9% 10% 14% 6% 10% 14% 8% 23% Lease Rollover Schedule % of ABR Expiring 8.8 Years of Weighted Average Lease Term Remaining 1. Credit Ratings are from S&P Global Ratings and Moody’s Investors Service. 0% |
| 10 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com High-Quality Top Tenant Base – Only REIT with Lowe’s in Top Five Credits Disclosed % of Rents from Investment Grade-Rated Tenants RATED IG 83% 68% 57% 17% 1. Due to the merger between O and SRC, we do not have a disclosed top 10 tenants list of the combined company. The top 10 tenants reflected are based on published information available on O’s website as of August 2024. 2. Top ten tenants and percentage of rents associated with investment grade-rated tenants based on published information available through each company’s website as of October 10, 2024. Not Disclosed 52% 1 36% 1 2 3 4 5 6 7 8 9 10 |
| 11 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Excellent Tenant Credit and Operational Transparency Investment Grade 52% Not Rated 17% Non-Investment Grade 31% Sporting Goods 17% Dollar Stores 13% Home Improvement 11% Pharmacy 10% Casual Dining 10% Home Furnishings 7% Consumer Electronics 7% Grocery 4% Entertainment 4% Off-Price Retail 4% Other 13% 100% ABR % ▪ 83% of ABR comes from tenants or the parent of a tenant that are credit rated or publicly traded, suggesting relatively better tenant financial and operational transparency Sector |
| 12 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Major Market, Strong Demographic-Driven Portfolio ▪ Geographically diversified portfolio focused on major markets and areas benefitting from demographic shifts and attractive supply/demand dynamics ▪ 53% of ABR comes from metropolitan statistical areas1 with population in excess of one million people % of Annualized Base Rent By State 1. MSA, or metropolitan statistical area, is the formal definition of a region that consists of a city and surrounding communities that are linked by social and economic factors, as established by the U.S. Office of Management and Budget. The names of the MSA have been shortened for ease of reference. 2. Based on 2023 Average Household Income (5-mile) and 2023 Total Population (5-mile) data from Esri. Total Portfolio Weighted Average 5-Mile Average Household Income $106,000 2 Total Portfolio Weighted Average 5-Mile Total Population 128,000 2 ▪ 47% of portfolio ABR comes from the top 10 MSAs1 , with more than 60% of ABR from the top 10 MSAs1 comes from major markets of Houston, Atlanta, Tampa, Chicago, Philadelphia and New York ▪ Properties in the top 10 MSAs have a weighted average 5-mile average household income of $123,0002 ▪ Properties in the top 10 MSAs have a weighted average 5-mile total population of 168,0002 >8% 4% - 7% < 2% |
| 13 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com $0.82 $1.02 $1.09 $1.10 $1.11 (1) 2020 2021 2022 2023 2024 Consistent Dividend Growth Stable, Well-Covered Dividend Current Annualized Dividend Annualized Per Share Cash Dividend Yield 6.2% As of September 30, 2024, unless otherwise noted. 1. 2024 dividend amount has been annualized utilizing the three previous dividends already establish in 2024. 2. 2024E FFO per share for PINE is the midpoint of guidance, as provided on October 17, 2024. Dividend Per Share Paid ▪ Current midpoint of 2024 guidance(2) implies a 67% 2024E FFO per share dividend payout ratio ▪ 40% increase in the quarterly cash dividend since the beginning of 2020 $1.12 |
| 14 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Alliance Global Partners Gaurav Mehta Buy $20.00 Baird Wes Golladay Outperform $18.00 B. Riley John Massocca Buy $20.00 BTIG Mike Gorman Buy $19.00 Colliers Barry Oxford Buy $19.00 Janney Rob Stevenson Buy $20.00 Jones Matthew Erdner Buy $19.00 Lucid Capital Markets Craig Kucera Buy $22.00 Raymond James RJ Milligan Outperform $19.00 Stifel Simon Yarmak Buy $19.75 Truist Anthony Hau Hold $18.00 UBS Michael Goldsmith Hold $19.00 Average $19.40 Institution Covering Analyst Rating Price Target As of October 17, 2024. Research Coverage Near Unanimous Buy or Outperform |
| 15 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Financial Strength Provides Solid Platform for Growth PINE has a demonstrated access to capital, is focused on maintaining reasonable leverage, and has completely fixed its attractive cost of debt through 2026. Equity Market Capitalization1 $277M Net Debt Outstanding2 $255M Total Enterprise Value (TEV) $531M Well-Capitalized Balance Sheet Q3 2024 48% Q3 2024 6.9x Q4 2023 51% Q4 2023 7.7x Q4 2022 47% Q4 2022 7.1x No Near-Term Capital Markets Exposure Stable Leverage Profile $80 $100 $100 2024 2025 2026 2027 2028 2029 2030 Revolving Credit Facility Unsecured Term Loans Staggered Debt Maturity Schedule Net Debt to TEV3 Net Debt to Pro Forma EBITDA4 Debt Outstanding 1 5 ▪ PINE has no debt maturities until May 2026 ▪ Minimal floating interest rate exposure ▪ Liquidity via cash and availability under revolving credit facility of approximately $80 million $ in millions; any differences a result of rounding. 1. As of September 30, 2024. 2. Net Debt Outstanding is the Company’s outstanding debt, minus the Company’s cash and cash equivalents. 3. Net Debt to TEV (Total Enterprise Value) is the Company’s outstanding debt, minus the Company’s cash and cash equivalents, as a percentage of the Company’s enterprise value. 4. See the “Non-GAAP Financial Information” section and tables at the end of this presentation for a discussion and reconciliation of Net Income to non-GAAP financial measures. 5. Reflects $79.5 million outstanding under the Company’s $250 million senior unsecured revolving credit facility; the Company’s senior unsecured revolving credit facility matures in January 2027 and includes a one-year extension option, subject to satisfaction of certain conditions; the maturity date reflected assumes the Company exercises the one-year extension option. |
| 16 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Outlook Raised for 2024 FFO and AFFO guidance per diluted share for 2024 is as follows: 2024 revised guidance was provided in the Company’s Third Quarter 2024 Operating Results press release filed on October 17, 2024. Investments ($84.2m YTD) $50 - $80 $100 - $110 $50 - $30 Dispositions ($68.8m YTD) $50 - $80 $70 - $75 $20 - ($5) Weighted Average Diluted Shares Outstanding 14.9 15.1 0.2 Guidance for 2024 assumes stable or improving economic activity, strong underlying business trends related to tenants, and includes but is not limited to the following assumptions (in millions): Previous Revised Increase 2024 2024 (Decrease) FFO per Diluted Share $1.58 - $1.62 $1.67 - $1.69 $0.09 - $0.07 AFFO per Diluted Share $1.60 - $1.64 $1.69 - $1.71 $0.09 - $0.07 |
| 17 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Corporate Responsibility Alpine Income Property Trust, through its external manager, is committed to sustainability, strong corporate governance, and meaningful corporate social responsibility programs. Committed Focus Committed to maintaining an environmentally conscious culture, the utilization of environmentally friendly & renewable products, and the promotion of sustainable business practices Tenant Alignment Alignment with environmentally aware tenants who have strong sustainability programs and initiatives embedded into their corporate culture and business practices Social Responsibility Environmental Responsibility Corporate Governance ▪ Independent Chairman of the Board and 5 of 6 Directors classified as independent ▪ Annual election of all Directors ▪ Annual Board of Director evaluations ▪ Stock ownership requirements for all Directors ▪ Prohibition against hedging and pledging Alpine Income Property Trust stock ▪ Robust policies and procedures for approval of related party transactions ▪ Opted out of business combination and control share acquisition statutes in the Maryland General Corporation Law ▪ All team members adhere to a comprehensive Code of Business Conduct and Ethics policy Inclusive and Supportive Company Culture Dedicated to an inclusive and supportive office environment filled with diverse backgrounds and perspectives, with a demonstrated commitment to financial, mental and physical wellness Notable Community Outreach Numerous and diverse community outreach programs, supporting environmental, artistic, civil and social organizations in the community |
| 18 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com External Management Alignment As of September 30, 2024. Aligned Ownership CTO currently owns an approximate 15% interest in PINE, meaningfully aligning its interests with PINE shareholders Independent Board of Directors PINE has its own independent Board of Directors and realizes economies of scale from the 34-member CTO team without the corresponding G&A expense Internalization Anticipated in the Future Internalization of management for PINE is anticipated in the future when the Company approaches or exceeds critical mass Opportunities for Collaboration PINE reviews transaction opportunities resulting from CTO’s acquisition efforts that it otherwise would not see in the market through normal single tenant acquisition efforts and relationships Benefits and Alignment of External Management Notable Management Agreement Terms ▪ Expires January 2025, with one-year extension options thereafter ▪ Quarterly management fee of 0.375%, calculated on equity, net of share buybacks and issuance costs ▪ Terminable with payment of a one-time fee of 3x the annualized average management fee for the preceding 24-months Alpine Income Property Trust is externally managed by CTO Realty Growth (NYSE: CTO) under an agreement that, combined with CTO’s ownership in PINE, provides economies of scale, significant shareholder alignment and a flexible/collapsible structure. |
| 19 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Disclaimer This press presentation may contain “forward-looking statements.” Forward-looking statements include statements that may be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include general business and economic conditions, continued volatility and uncertainty in the credit markets and broader financial markets, risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, credit risk associated with the Company investing in first mortgage investments, illiquidity of real estate investments and potential damages from natural disasters, the impact of epidemics or pandemics (such as the COVID-19 Pandemic and its variants) on the Company’s business and the business of its tenants and the impact of such epidemics or pandemics on the U.S. economy and market conditions generally, other factors affecting the Company’s business or the business of its tenants that are beyond the control of the Company or its tenants, and the factors set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other risks and uncertainties discussed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made in this presentation speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. References in this presentation: 1. All information is as of September 30, 2024, unless otherwise noted and any differences in calculations are assumed to be a function of rounding. 2. Annualized straight-line Base Rent (“ABR” or “Rent”) and the statistics based on ABR are calculated based on our current portfolio as of September 30, 2024. 3. Dividends are set by the Board of Directors and declared on a quarterly basis and there can be no assurances as to the likelihood or amount of dividends in the future. 4. The Company defines an Investment Grade (“IG”) Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners of Baa3, BBB-, or NAIC-2 or higher. If applicable, in the event of a split rating between S&P Global Ratings and Moody’s Investors Services, the Company utilizes the higher of the two ratings as its reference point as to whether a tenant is defined as an Investment Grade Rated Tenant. 5. The Company defines a Credit Rated Tenant as a tenant or the parent of a tenant with a credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners. |
| 20 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Non-GAAP Financial Information Our reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We also disclose Funds From Operations (“FFO”) Adjusted Funds From Operations (“AFFO”), and Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, AFFO, and Pro Forma EBITDA do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. To derive AFFO, we further modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as loss on extinguishment of debt, amortization of above- and below-market lease related intangibles, straight-line rental revenue, amortization of deferred financing costs, non-cash compensation, and other non-cash income or expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals. To derive Pro Forma EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination and/or payoff, and real estate related depreciation and amortization including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, loss on extinguishment of debt, above- and below-market lease related intangibles, non-cash compensation, other non-cash income or expense, and other non-recurring items such as disposition management fees and commission fees. Cash interest expense is also excluded from Pro Forma EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities. FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. FFO, AFFO, and Pro Forma EBITDA may not be comparable to similarly titled measures employed by other companies. |
| 21 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Statement of Operations Alpine Income Property Trust, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except share, per share and dividend data) (1) Includes the weighted average of 1,223,854 shares during the three and nine months ended September 30, 2024 and 1,703,494 shares during the three and nine months ended September 30, 2023, in each case, underlying OP Units including (i) 1,223,854 shares underlying OP Units issued to CTO Realty Growth, Inc. and (ii) 479,640 shares underlying OP Units issued to an unrelated third party, which OP Units were redeemed by PINE for an equivalent number of shares of common stock of PINE during the three months ended December 31, 2023. Revenues: Lease Income $ 11,718 $ 11,447 $ 34,512 $ 33,951 Interest Income from Commercial Loans and Investments 1,663 112 3,552 112 Other Revenue 99 — 372 — Total Revenues 13,480 11,559 38,436 34,063 Operating Expenses: Real Estate Expenses 1,841 1,722 5,569 4,731 General and Administrative Expenses 1,843 1,652 4,987 4,823 Provision for Impairment 422 2,864 1,110 2,864 Depreciation and Amortization 6,340 6,528 19,074 19,286 Total Operating Expenses 10,446 12,766 30,740 31,704 Gain on Disposition of Assets 3,426 2,586 4,344 7,782 Gain on Extinguishment of Debt — — — 23 Net Income From Operations 6,460 1,379 12,040 10,164 Investment and Other Income 61 125 186 226 Interest Expense (3,167) (2,443) (8,933) (7,494) Net Income (Loss) 3,354 (939) 3,293 2,896 Less: Net (Income) Loss Attributable to Noncontrolling Interest (274) 102 (269) (314) Net Income (Loss) Attributable to Alpine Income Property Trust, Inc. $ 3,080 $ (837) $ 3,024 $ 2,582 Per Common Share Data: Net Income (Loss) Attributable to Alpine Income Property Trust, Inc. Basic $ 0.22 $ (0.06) $ 0.22 $ 0.18 Diluted $ 0.21 $ (0.05) $ 0.20 $ 0.16 Weighted Average Number of Common Shares: Basic 13,744,232 13,946,194 13,663,752 14,001,774 Diluted (1) 14,968,086 15,649,688 14,887,606 15,705,268 Dividends Declared and Paid $ 0.280 $ 0.275 $ 0.830 $ 0.825 |
| 22 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Non-GAAP Financial Measures Reconciliation Three Months Ended Nine Months Ended September 30, 2024 September 30, 2024 September 30, 2024 September 30, 2024 Net Income (Loss) $ 3,354 $ (939) $ 3,293 $ 2,896 Depreciation and Amortization 6,340 6,528 19,074 19,286 Provision for Impairment 422 2,864 1,110 2,864 Gain on Disposition of Assets (3,426) (2,586) (4,344) (7,782) Funds from Operations $ 6,690 $ 5,867 $ 19,133 $ 17,264 Adjustments: Gain on Extinguishment of Debt — — — (23) Amortization of Intangible Assets and Liabilities to Lease Income (136) (110) (361) (299) Straight-Line Rent Adjustment (216) (112) (370) (386) Non-Cash Compensation 79 79 238 238 Amortization of Deferred Financing Costs to Interest Expense 180 179 540 530 Other Non-Cash Expense 52 29 111 86 Adjusted Funds from Operations $ 6,649 $ 5,932 $ 19,291 $ 17,410 FFO per Diluted Share $ 0.45 $ 0.37 $ 1.29 $ 1.10 AFFO per Diluted Share $ 0.44 $ 0.38 $ 1.30 $ 1.11 Alpine Income Property Trust, Inc. Non-GAAP Financial Measures Funds From Operations and Adjusted Funds From Operations (Unaudited) (In thousands, except per share data) |
| 23 © 2024 Alpine Income Property Trust, Inc. | alpinereit.com Net Debt-to-EBITDA Pro Forma Reconciliation Alpine Income Property Trust, Inc. Non-GAAP Financial Measures Reconciliation of Net Debt to Pro Forma Adjusted EBITDA (Unaudited) (In thousands) 1. Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s investments and disposition activity during the three months ended September 30, 2024. Net Income $ 3,354 Adjustments: Depreciation and Amortization 6,340 Provision for Impairment 422 Gain on Disposition of Assets (3,426) Amortization of Intangible Assets and Liabilities to Lease Income (136) Straight-Line Rent Adjustment (216) Non-Cash Compensation 79 Amortization of Deferred Financing Costs to Interest Expense 180 Other Non-Cash Adjustments 52 Other Non-Recurring Items (26) Interest Expense, Net of Deferred Financing Costs Amortization and Interest on Obligation Under Participation Agreement 2,712 Adjusted EBITDA $ 9,335 Annualized Adjusted EBITDA $ 37,340 Pro Forma Annualized Impact of Current Quarter Investment Activity (1) (233) Pro Forma Adjusted EBITDA $ 37,107 Total Long-Term Debt $ 278,898 Financing Costs, Net of Accumulated Amortization 602 Cash and Cash Equivalents (2,560) Restricted Cash (22,365) Net Debt $ 254,575 Net Debt to Pro Forma Adjusted EBITDA 6.9x Three Months Ended September 30, 2024 |
| Investor Inquiries: Philip R. Mays, Chief Financial Officer and Treasurer, (407) 904-3324, pmays@alpinereit.com |
