WINTER PARK, Fla., Oct. 17, 2024 (GLOBE NEWSWIRE) -- 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.
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 | % | |||||||
| (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 to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO, and AFFO per diluted share. |
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. |
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.
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% | |
| (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. |
| 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. |
| 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 |
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