Alpine Income Property Trust Q1 2025 Earnings Report

Alpine Income Property Trust EPS Results

• Actual EPS: $0.44
• Consensus EPS: $0.43
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Alpine Income Property Trust Revenue Results

• Actual Revenue: $14.21 million
• Expected Revenue: $13.93 million
• Beat/Miss: Beat by +$280.00 thousand
• YoY Revenue Growth: N/A

Alpine Income Property Trust Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: After Market Closes
• Conference Call Date: Friday, April 25, 2025
• Conference Call Time: 9:00AM ET

Alpine Income Property Trust (NYSE:PINE) is a real estate investment trust (REIT) that acquires, owns and operates a portfolio of income-producing commercial properties. The company primarily invests in single-tenant retail and office properties that are generally leased under long-term net lease agreements, under which tenants typically assume responsibility for property taxes, insurance and maintenance expenses.

Alpine’s properties are located across the United States and are leased to a range of national, regional and local tenants. Its portfolio strategy is focused on generating rental income through properties in established markets and on working with tenants that support the stability of its long-term lease portfolio.

Alpine Income Property Trust was formed in 2019 and is externally managed by CTO Realty Growth, Inc., another publicly traded real estate company. The trust is led by John P. Albright, who also serves as president and chief executive officer of CTO Realty Growth. Alpine operates as a REIT and generally must distribute a substantial portion of its taxable income to shareholders to maintain its tax status.

Alpine Income Property Trust Q1 2025 Earnings Call Transcript

Key Takeaways

• AFFO of $0.44 per diluted share in Q1 rose about 5% year-over-year, and Alpine increased its quarterly dividend to $0.0285, marking its annual upsizing streak since IPO.
• Q1 investment activity totaled $79.2 million at a 9% average initial yield, comprising three property acquisitions (8.6% cap rate) and structured financings (9.5% yield) to diversify the portfolio.
• Portfolio weighted average lease term (WALT) extended to 9 years from 6.9 years year-over-year, as long-term lease acquisitions (14.3 years) and targeted disposals (4.7 years) bolster income stability and reduce concentration.
• Two non-income assets—a Reno theater and a Party City—resulted in an impairment provision and will eliminate roughly $0.08 in quarterly AFFO until those properties are sold.
• Full-year FFO and AFFO guidance was raised to $1.74–$1.77 per share (from $1.70–$1.73), driven by active capital deployment, about $7.6 million in share buybacks, and a $50 million SOFR swap fixed at 3.43%.

Presentation

[Operator]

Good day and welcome to the Alpine First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would now like to turn the call over to Jenna McKinney, Director of Finance. Please go ahead.

[Jenna McKinney, Director of Finance at Alpine Income Property Trust]

Thank you. I would like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q, and other SEC filings. You can find our SEC report, earnings release, and most recent investor presentation, which contain reconciliations of the non-GAAP financial measures we use, on our website at www.alpinereit.com. With that, I will turn the call over to John.

[John Albright, President and CEO at Alpine Income Property Trust]

Thanks, Jenna. The first quarter was an excellent start to the year for Pine across all areas of our business. Starting with earnings, we achieved AFFO of $0.44 per diluted share for the quarter, representing growth of approximately 5% compared to the first quarter of last year. As previously announced, this growth in earnings and free cash flow provided support for us to raise our common dividend to a new quarterly rate of $0.28 paid in the first quarter, continuing Pine's practice of increasing its annual dividend every year since its IPO. Further, Pine's dividend yield continues to be one of the highest in the sector. Driving our earnings growth was another successful quarter of investment activity. During the quarter, we acquired three properties for $39.7 million at a weighted average initial cap rate of 8.6%.

[John Albright, President and CEO at Alpine Income Property Trust]

We also originated two mortgages plus upsized two existing ones for a combined total of $39.5 million, with a weighted average initial yield of 9.5%. The company's total investment activity for the quarter, including both property acquisitions and structured finance investments, totaled $79.2 million at a weighted average initial yield of 9%. Our property acquisitions included Alamo Drafthouse Theater, co-signed by its owner, Sony Pictures, with an investment-grade credit, and Academy Sports, and the headquarters and manufacturing facility for Germfree Labs. Our structured financings in the quarter included $6.2 million of seller financing for a property leased to At Home that was sold in the quarter, a new $15.5 million construction loan, and upsizing two existing construction loans, one for Wawa and the other for a Publix-anchored center.

[John Albright, President and CEO at Alpine Income Property Trust]

During the quarter, we sold three properties for $11.7 million, including an O'Reilly Auto Parts, a multi-tenanted property, including an At Home, and a former Valero convenience store at a blended cap rate of 9.1%. Our transaction activity in the first quarter flexed our strategic approach to investing, focused on buying a mix of high-credit tenants that provide consistent, stable cash flows and lesser credits that offer growth and diversification, continuing to augment and complement our property investments by selectively originating structured investments, opportunistically selling properties that reduce portfolio risk and improve our industry and tenant concentrations, and extending our wallet. Notably, this quarter's acquisitions had an average wallet of 14.3 years, while the properties that we sold had a wallet of 4.7 years. With this activity, our portfolio wallet is now 9 years compared to 6.9 years just 12 months ago.

[John Albright, President and CEO at Alpine Income Property Trust]

Additionally, as Pine's common shares have been trading at attractive relative valuation, we have been opportunistically repurchasing shares as Phil will discuss. Finally, I want to provide some context relating to the recent tariff volatility and uncertainty. While there is little visibility into what the ultimate outcome of this extraordinary activity will be, I believe Pine is well-positioned given its tenant mix and sector diversification. We will continue to monitor the situation that evolves. As for now, we see an attractive pipeline of opportunities across the tenant landscape and remain focused on executing our strategy to deliver growth and stability for Pine's investors. With that, I will turn the call over to Phil.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Thanks, John. Beginning with financial results, total revenue was $14.2 million for the quarter, including lease income of $11.8 million and interest income from commercial loans of $2.3 million. FFO and AFFO for the quarter were both $0.44 per diluted share, representing growth of 7.3% and 4.8% respectively compared to the comparable quarter of the prior year. Driving earnings growth for the quarter was investment activity along with prudent and disciplined capital management. During the first quarter, we opportunistically repurchased approximately 274,000 common shares for $4.5 million at an average price of $16.33 per share. Further, since quarter end, we have continued to repurchase shares as noted in our press release and Form 10-Q filed last evening. Additionally, in April, when interest rates temporarily dropped in connection with initial tariff announcements, we opportunistically executed a SOFR swap, fixing SOFR for $50 million of principal at 3.43% through January 1st, 2027.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

This swap is being applied to $50 million of borrowings currently outstanding on our revolving credit facility, reducing the interest rate thereon from approximately 6% at quarter end to approximately 5% based on our current leverage and applicable pricing tier. We ended the quarter with net debt to pro forma adjusted EBITDA of 7.9 times. However, it is notable that we have no debt maturing until 2026, and thereafter, our debt maturities are well staggered. Additionally, at quarter end, we had $65 million of liquidity consisting of approximately $8 million of cash available for use and $57 million available under our revolving credit facility. Further, with current in-place bank commitments, the availability under our revolving credit facility can expand by an additional $36 million as we acquire properties, providing total potential liquidity of approximately $100 million.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

John noted that during the first quarter, we increased our common dividend and paid a quarterly cash dividend of $0.28. Even with this increase, our dividend remains well covered and supported by free cash flow with an approximate AFFO payout ratio of 65%. Finally, turning to guidance, we are increasing both our FFO and AFFO guidance for the full year of 2025 to a range of $1.74-$1.77 per diluted share compared to our prior range of $1.70-$1.73 per diluted share. Once again, our increase was driven by our successful investment activity to start the year and now assumes an investment volume of $70 million-$100 million and dispositions of $50 million-$70 million. Specifically, with regards to dispositions, in April, we sold one Walgreens and expect to close the sale of another in May.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

This would reduce our Walgreens to eight properties and continue decreasing our ABR derived from Walgreens' leases. With that, Operator, please open the line for questions.

[Operator]

Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Michael Goldsmith with UBS. Your line is open.

[Michael Goldsmith, U.S. REITs Analyst at UBS]

Good morning. Thanks a lot for taking my questions. First question is just on the AFFO guidance raise. Can you walk through kind of, you know, you've been quite active during the period, so can you kind of walk through the factors that drove your ability to raise your earnings guidance this quarter? Thanks.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yeah, Michael, this is Phil. It was really three things that drove the increase almost equally. One is the stock buyback. If you look at disclosed in the queue, including purchases after the end of the quarter, we've purchased $7.6 million worth of stock at an average price now of about $16.15. Just, you know, lowering the denominator through buybacks and being opportunistic is one of the factors. Additionally, the swap that I spoke about in my prepared remarks for $50 million, which took effect early April, that was floating on the line at about 6%. It immediately dropped to about 5%, so 100 basis points pickup. Finally, on the investments, you know, it's a little bit of volume, a little bit of timing, a little bit of cap rate, so kind of all three factors. It's almost equally those three things.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

They're each $0.015 or so, and that's what drove the increase in the guidance.

[Michael Goldsmith, U.S. REITs Analyst at UBS]

That's helpful. Maybe just a clarification, you know, you took the investment guidance up to $70 million-$100 million, so up $20 million, but it looks like you did $80 million in the quarter. Am I missing something there, or is it just to reconcile those numbers?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

I think it's probably just on the loans and funding. For the quarter, we did, you know, almost $40 million in property acquisitions, and we funded, you know, close to $20 million in loans. We originated, you know, a higher amount, but we funded about $20. Combined for the quarter, we were at about $60 million funded and out the door.

[Michael Goldsmith, U.S. REITs Analyst at UBS]

Got it. Thanks for that. Just a question on the share repurchases, right? How are you thinking about this going forward? Is this, you know, and just within the grand scheme of capital allocation, you know, you've been doing more loans, you've been acquiring, and now you're buying back stock. Can you just kind of walk through, like, you know, your priorities in terms of capital allocation, how you're thinking, you know, you were active in kind of all three in the first quarter. How active do you think you'll be across the board kind of through the balance of the year?

[John Albright, President and CEO at Alpine Income Property Trust]

Hey, Michael, this is John. Thanks for the question. Yeah, I mean, look, when the shares are trading at such a big discount to NAV and such a high dividend yield, certainly we've had a history of both the CTO and Pine to take advantage of that dislocation. We're much better off selling assets and buying and accreting to NAV and accreting earnings by buying at such low prices. You know, we are coming at the, you know, closer to the end of our $10 million buyback. You know, we'll see kind of, you know, after, you know, the program kind of gets filled up, kind of where we sit. Given our free cash flow stance, and, you know, we can always sell assets and do that, but that, you know, obviously is shrinking the company and not exactly the plan.

[John Albright, President and CEO at Alpine Income Property Trust]

As we see, you know, loan opportunities and some of these loans are going to be maturing here this year, and that will come in and pay down debt and kind of get us in a good spot for acquisitions. As Phil mentioned and as prepared remarks, we've got plenty of liquidity. So we're, you know, we're taking, trying to take advantage of some good opportunities out there, and the pipeline looks good. It's really a mixture of kind of balancing between buybacks and acquisitions and investments.

[Michael Goldsmith, U.S. REITs Analyst at UBS]

Thanks, guys. Good luck in the second quarter.

[John Albright, President and CEO at Alpine Income Property Trust]

Thank you.

[Operator]

Thank you. Our next question comes from Matthew Erdner with Jones Trading. Your line is open.

[Matthew Erdner, Research Associate at Jones Trading]

Hey, good morning, guys. Thanks for taking the questions. John, I kind of want to touch on the tariffs that you had talked a little bit earlier, but when it comes to kind of just getting the deals done, you know, obviously convenience stores, I think, are kind of sheltered from that. Could you kind of talk about the process, you know, as you're selling the At Home or as you kind of look to move on from some of these retail guys that might be affected, just kind of the timing of the deals that it's taking now compared to what it was, you know, say, a year ago?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. I mean, you know, we're not seeing any sort of big dislocation with the tariff issues, surprisingly, I guess. You know, given our platform at CTO, that's more obviously leasing involved, we're not, you know, seeing some sort of disruption in tenant activity as far as opening new stores, committing to new stores, and so forth. You know, we're certainly not seeing any disruption at the Pine platform as far as tenant issues. You know, restaurants are doing strong. You know, we picked up an Alamo Drafthouse Theater outside of Denver that's, you know, has Sony on the lease, and that's been super strong. Those things are obviously insulated from tariff issues. You know, we're definitely monitoring it, but so far, so good and clear selling, but we certainly have an eye out for any issues that may happen.

[Matthew Erdner, Research Associate at Jones Trading]

Got it. That's helpful. I appreciate the color there. You know, kind of as a follow-up, turning back to guidance, you know, what's going to drive you to that kind of higher range of investment guidance? You know, will that be, you know, kind of getting towards that $75-ish million in dispositions and just capital recycling?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. I mean, you know, just kind of a step back, you know, given that, you know, we do have the advantage of a small company. We can, you know, we have two assets, as you know, that currently right now are not contributing any income. That's a Party City in Long Island, N.Y., and a theater in Reno. The theater in Reno, we have under contract to sell. The Party City, we're actively marketing that and have indicative interest now, but we're trying to get better pricing. Once we sell those assets, which we expect to do this year, you know, having that go to pay down leverage or reinvest is certainly going to, you know, be catalyst for the upside of our earnings guidance.

[John Albright, President and CEO at Alpine Income Property Trust]

You know, even at the low side of our earnings guidance, you know, look at our multiple is like, you know, ridiculously low and a high dividend and lots of free cash flow. If you take the, you know, dividend yield of roughly 7% and our free cash flow that, you know, you add on those percentages, you know, you're getting a nice total return just sitting here. You know, that's not what we're here to do. We're here to outperform. I think, you know, we have an easy kind of roadmap to do that. We'll try to keep on performing for you.

[Matthew Erdner, Research Associate at Jones Trading]

All right. That's very helpful. I appreciate the time this morning. Thanks, guys.

[John Albright, President and CEO at Alpine Income Property Trust]

Thanks.

[Operator]

Thank you. Our next question comes from Rob Stevenson with Janney Montgomery Scott. Your line is open.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Good morning, guys. John, so you sold $12 million at, you know, a little over nine cap rate, and the guidance is now $50 million-$80 million of full year dispositions. Given the mix of assets that you're looking to sell over the remainder of the year, what type of cap rate should we be expecting is reasonable to assume on the remaining call at $40 million-$70 million of dispositions? Is it something in that sort of high eights, low nines? Is it something substantially lower than that? Given the mix that you're looking to sell, how should we be thinking about that?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. I think given the, you know, mix of, you know, possibly having some properties with no income, you know, that could be, you know, lower for the mix going forward. However, you know, we are, you know, taking the pain with some of the sales that we've just done at higher yields as we talked about, you know, pruning the portfolio, you know, making it more fortified by, you know, selling some of the, you know, the Walgreens and so forth, which we've made some good progress. It is going to be a mixture, but I would say going forward, it will tend to be lower than what it has been.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Okay. To that point on the Walgreens, I think Phil said that you sold one here in April and have another under contract for May sale. What is the market today for Walgreens locations given that sort of weird lease that they have typically? You know, the Sycamore deal. Does Sycamore provide, you know, given where that stock was trading down, is Sycamore a benefit or is the private equity similar to what you saw with At Home where people are running away from private equity-backed sponsors with some of these?

[John Albright, President and CEO at Alpine Income Property Trust]

I think it adds a little bit more stability in far as knowing that, you know, before Sycamore, you know, there was just an unknown, what happens to the company? Are there no buyers? Is the company really going all the way down? That sort of thing. I think it adds stability in a platform. I think, you know, we're actually, you know, in talking with some of the merchant developers, some of them are starting to have programs to go after purchasing Walgreens to reformat into other uses given the sites are generally very strong at corner locations and drive-throughs and so forth.

[John Albright, President and CEO at Alpine Income Property Trust]

I think you're starting to see in the private market people becoming more aggressive in acquiring these with, you know, a tail of lease with Walgreens and with the expectation they'll be able to get the site back and repurpose it for another use. We're actually, I would say, net net, you know, within, you know, last 60 days is a more positive view than before.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Okay. That's very helpful. Can you remind us how many of the Family Dollar, Dollar Tree locations you have currently in the portfolio and whether or not they are predominantly Family Dollars or Dollar Trees?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. I'm going to introduce you to Steven Greathouse, our Chief Investment Officer. I'm out of the office at different locations. Steven, you want to give Rob a little bit of color on that?

[Steven Greathouse, Chief Investment Officer at Alpine Income Property Trust]

Sure. Hey, Rob. I think we have about 31 total between Dollar Tree and Family Dollar. On the spin, when they go out, sorry, 25 and 31 Dollar generals, I guess, but 25 Dollar Trees. You know, when they spin, we're all kind of waiting to happen what's going to happen with the dual-branded ones. About half of those have Dollar Tree credit that will stay on with the spin. I think, you know, we're well positioned on those. They were all relatively new, so they've got, you know, eight-plus years of term left on them.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Okay. So 31 total, 25 of those are Dollar Tree, so six are Family Dollars, and three of those Family Dollars keep the Dollar Tree credit, and the other three will have the Brigade Macellum credit on it. Is that, I got that correct?

[Steven Greathouse, Chief Investment Officer at Alpine Income Property Trust]

No, it was 25 Family Dollars, and about half of those have the Dollar Tree credit on them.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Okay. It was six Dollar Trees, 25 Family Dollars, and half of those 25 or so have the Dollar Tree credit, and the other half have the private equity credit.

[Steven Greathouse, Chief Investment Officer at Alpine Income Property Trust]

There you go. That's right.

[Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott]

Okay. All right. That's helpful. Thanks, guys. Appreciate the time this morning.

[John Albright, President and CEO at Alpine Income Property Trust]

Thanks, Rob.

[Operator]

Thank you. Our next question comes from Wesley Golladay with Baird. Your line is open.

[Wesley Golladay, Senior Research Analyst at Baird]

Hey, good morning, everyone. For the seller financing for the At Home, was that to a developer?

[John Albright, President and CEO at Alpine Income Property Trust]

It was. It was kind of investor developer.

[Wesley Golladay, Senior Research Analyst at Baird]

Okay. When you're looking to sell the theater, does that actually have a negative NOI right now? Will you provide seller financing if the deal goes through?

[John Albright, President and CEO at Alpine Income Property Trust]

It does have a negative NOI, and yes, we would offer up seller financing on that. The deal that we're negotiating with now, they do not want our financing; they're all cash.

[Wesley Golladay, Senior Research Analyst at Baird]

Okay. Can you talk about the Germfree? Will you see more deals like that? Is that like a one-off type deal for you?

[John Albright, President and CEO at Alpine Income Property Trust]

We hope so, but, you know, right now it's kind of a one-off. We don't see anything, you know, in the future, but it's super unique. It's really one where we had a competitive advantage given that we were local to this investment opportunity. You know, Germfree Labs has been around over 50 years. Private equity group bought them. They have no leverage. They're using part of the proceeds to invest in the facility. It's a headquarter and manufacturing facility for, you know, unique, you know, lab, mobile lab development for hospitals, and they have a worldwide footprint. If you have a nasty virus like COVID, you're going to buy one of their mobile labs if you're a hospital because you don't want to be dealing with a virus within a hospital where it could escape and be bad news.

[John Albright, President and CEO at Alpine Income Property Trust]

You want to have it out in the parking lot or in the back in a mobile lab.

[Wesley Golladay, Senior Research Analyst at Baird]

Okay. One last one for me. You had two loans that were upsized on the construction side. What is driving that?

[John Albright, President and CEO at Alpine Income Property Trust]

You know, basically, you know, a little bit of construction costs or, you know, you could have a situation where the developer has another pad site user that has come on and that, you know, they might need site development work for that. Mainly, it was probably an escalation of development costs.

[Wesley Golladay, Senior Research Analyst at Baird]

Okay. Thank you.

[John Albright, President and CEO at Alpine Income Property Trust]

Yep. Thanks, Wes.

[Operator]

Thank you. Our next question comes from Gaurav Mehta with Alliance Global Partners. Your line is open.

[Gaurav Mehta, CFA, Managing Director, and Senior Equity Research Analyst of Real Estate and Financials at Alliance Global Partners]

Yeah. Thank you. Good morning. I wanted to ask you on a provision for impairment charge that you had in first quarter. Can you provide some details on that?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yeah. This is Phil. On the impairment charge for the first quarter, it was not anything that we sold in the quarter. It is more related to properties that we anticipate selling in the short term, such as like the Walgreens that I mentioned that we have one under contract and one sold. It is more related to upcoming dispositions. We were just, you know, given we know where they are going to trade, just it was cleaning up and getting our bases in line with that.

[Gaurav Mehta, CFA, Managing Director, and Senior Equity Research Analyst of Real Estate and Financials at Alliance Global Partners]

Okay. And then second on the loan side, can you provide some color on timing of funding the unfunded commitments within your portfolio?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

What was the question?

[Gaurav Mehta, CFA, Managing Director, and Senior Equity Research Analyst of Real Estate and Financials at Alliance Global Partners]

The timing of funding the unfunded commitments within the loan portfolio.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Just the timing of funding on the loan portfolio?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yeah.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yeah. Currently, the word currently stands, it should be relatively consistent like that for the first half of the year. We do have, call it the third quarter, one of the larger loans maturing, but there'll be new funding that will fill in. It may, assuming we don't do any additional ones, it'll be pretty even, maybe a little less towards the end of the year. You know, we're hopeful that maybe we'll do some additional loans and the funding amount will stay very similar over the year.

[Gaurav Mehta, CFA, Managing Director, and Senior Equity Research Analyst of Real Estate and Financials at Alliance Global Partners]

Okay. Thank you. That's all I had.

[Operator]

Thank you. Our next question comes from RJ Milligan with Raymond James. Your line is open.

[RJ Milligan, Managing Director at Raymond James]

Hey, good morning, guys. Just a couple of follow-ups. I guess we'll start with the cap allocation questioning that started the call, but just curious how you think leverage is going to trend. It ticked up here in the first quarter. I know you guys have some loan payoffs and some dispositions coming, and I'm just curious where you think you might end up the year on the leverage side.

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. I'll take kind of the general on that, and then Phil can dive deeper. Thanks, RJ, for the question. You know, given that, you know, we have this active share buyback program, and given that we had a very active investment quarter, certainly the leverage, you know, ticked up. You know, as Phil mentioned, and fair marks, we still have a lot of liquidity. Given that we have some of our loans will be, you know, paying down and paying off this year, you know, and we, as I mentioned, expect to sell our vacant properties this year. I don't anticipate at the end of the year having more leverage than we are now and maybe less.

[RJ Milligan, Managing Director at Raymond James]

Okay. Then my second question is, you know, obviously we can look at the top 10 list and get an understanding of, you know, who's on the credit watch list, but I'm just curious, looking at the structured investment portfolio, is there anybody there that you would classify as sort of on the tenant watch list because it's obviously a lot more difficult to underrate from our perspective?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. No, the structured investment program has basically been geared towards loans on very high-quality credits that we wouldn't be able to purchase on our own because of where they trade on a very low cap rate. It's, you know, talk about Publix, you know, Grocer, or Wawa. You know, there's no tenant issues from our perspective on the structured investment program. Super strong assets, and we'd love to own them if we could.

[RJ Milligan, Managing Director at Raymond James]

Great. My last question is for Phil, just thinking about run rate of NOI from the first quarter going forward, is there anything in there that we should be thinking about for the next three quarters?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Just probably the only item I'd note, RJ, is Party City. If you remember when we gave our initial guidance, you know, we said there was about an eight-cent hit related to the theater, which quickly paid rent towards the end of 2024, and then also Party City. That was steady since it was spread almost equally between the two, four cents and four cents. The theater did exit right at the end of last year, so the current quarter had nothing in it from them. Party City did pay as we anticipated for the entire first quarter, and now they will, you know, no longer pay the rest of the year. The Party City will go away, call it a couple hundred grand a quarter going forward, starting in the second quarter. Other than that, it would just be acquisition and disposition volume.

[RJ Milligan, Managing Director at Raymond James]

Okay. Great. That's it for me. Thanks, guys.

[John Albright, President and CEO at Alpine Income Property Trust]

Thanks, RJ.

[Operator]

Thank you. Our next question comes from John Massocca with B. Riley Securities. Your line is open.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Good morning.

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Morning.

[Wesley Golladay, Senior Research Analyst at Baird]

Morning.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Maybe just to clarify around that on the guidance front, does guidance include any resolution around the Reno Theater and Party City assets, either at the high end or midpoint, or is that just kind of totally there's zeros for the rest of the year in terms of guidance?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yes. In terms of rent, there's zeros for the rest of the year. You know, if we sell them, you know, they would obviously get some cash, pay down debt, and there'd be some interest savings. They're going to be incrementally favorable if they're not going to be huge movers to our earnings for this year.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Okay. Are they in guidance as like the high end, maybe dispositions as like vacant sales?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

Yeah. Like our disposition volume, yeah, if you want to include them, they're in the high end.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Okay. At Home, I know we've talked about it a little bit already, but what was kind of the amount of financing relative to your kind of basis in the property? I guess, does the current % exposure in the deck to At Home reflect the interest income from the seller financing, or is that just the remaining At Homes you have in your portfolio?

[Phil Mays, SVP, CFO, and Treasurer at Alpine Income Property Trust]

That's just the remaining that we have in our portfolio. It was the seller financing was around 65% LTV.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Okay. And then maybe just kind of big picture on the Germfree Labs property, I guess kind of what, I mean, you talked a little bit about the tenant and why they're attractive, but maybe the asset itself, I mean, how kind of fungible is that property if something were to ever happen in the future, and just kind of maybe some more details on what the asset actually is and could be repurposed for?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. Yeah. Yeah. Good question. Yeah. It's very fungible in your terms. You know, it's a manufacturing facility with very high ceilings, and they've just basically made this into, you know, kind of their headquarters, both a small amount of office and manufacturing. This would be in high demand as far as industrial use if they weren't there. It's a very low per square foot basis. We bought it at $125 of square foot. Big land footprint, lots of parking, and, you know, very, very usable in this industrial market.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Geographically in the Central Florida area, or is that just where the company's based?

[John Albright, President and CEO at Alpine Income Property Trust]

Yeah. Central Florida and closer to our Daytona office. You know, this company's been around over 50 years. It's well-suited for them, and they're basically expanding their manufacturing operations. They're using part of the proceeds to go into the property.

[John Massocca, Senior Research Analyst at B. Riley Securities]

Okay. I appreciate the color. That's it for me. Thank you.

[John Albright, President and CEO at Alpine Income Property Trust]

Sure.

[Operator]

Thank you. There are no further questions at this time. This does conclude the question-and-answer session. Thank you for your participation. You may now disconnect. Everyone, have a great day.

Participants

Executives

• John Albright, President and CEO
• Phil Mays, SVP, CFO, and Treasurer
• Jenna McKinney, Director of Finance
• Steven Greathouse, Chief Investment Officer

Analysts

• Matthew Erdner, Research Associate at Jones Trading
• Wesley Golladay, Senior Research Analyst at Baird
• Gaurav Mehta, CFA, Managing Director, and Senior Equity Research Analyst of Real Estate and Financials at Alliance Global Partners
• Michael Goldsmith, U.S. REITs Analyst at UBS
• John Massocca, Senior Research Analyst at B. Riley Securities
• Rob Stevenson, Managing Director and Head of Real Estate Research at Janney Montgomery Scott
• RJ Milligan, Managing Director at Raymond James