Alpine Income Property Trust Announces 2023 Transaction Activity and Provides Corporate Update
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The disclosed investment and disposition activities of Alpine Income Property Trust, Inc. for 2023 suggest a strategic approach to property management and capital allocation. The acquisition of 14 net lease retail properties with a significant portion of annualized base rents backed by investment-grade tenants indicates a focus on stable, creditworthy income streams. This is a positive signal for investors, as it may imply a lower risk profile for the company's revenue.
The structured investments with a higher initial yield than the acquisitions could point to a diversification strategy aimed at enhancing overall portfolio yield. This balance between relatively stable retail property acquisitions and higher-yielding structured investments could be seen as a way to optimize income while managing risk.
Furthermore, the share repurchase program suggests that management believes the stock is undervalued. The repurchase of shares at prices below the ATM offering indicates a potential for accretive transactions to shareholder value. However, the mix of share repurchases and equity issuance within the same fiscal year warrants a closer examination of the company's capital structure strategy.
The financial activities reported by Alpine Income Property Trust, Inc., including the weighted average going-in cash cap rate and initial investment yields, offer insights into the company's investment acumen and market conditions. A going-in cash cap rate of 7.4% for acquisitions and an exit cap rate of 6.3% for dispositions highlight a positive investment spread, which could be indicative of effective asset management and value creation.
The reported aggregate gains from property sales reflect successful capital recycling, which could enhance shareholder returns. It's important to note that the company's no debt maturities until 2026 provide financial stability and reduce short-term refinancing risk in a potentially volatile interest rate environment.
Investors should consider the implications of the company's balance sheet activities, including share repurchases and the ATM offering, on earnings per share and the cost of equity. The net effect of these activities on the company's leverage and liquidity ratios is also a critical aspect to evaluate.
The performance of Alpine Income Property Trust, Inc. can be assessed within the context of the REIT industry standards. The focus on net lease properties, where tenants are responsible for most property expenses, is a common strategy for REITs seeking stable cash flows. The company's portfolio update, with a weighted average remaining lease term of 7.0 years, suggests a moderate level of lease expiration risk.
The emphasis on tenants with investment grade credit ratings is aligned with industry best practices for risk mitigation. Additionally, having no debt maturities until 2026 is favorable compared to some REIT peers who may face near-term debt obligations amidst potential interest rate hikes.
The top five tenants, including prominent retailers with strong credit ratings, provide a resilient income profile, which is crucial during economic uncertainties. However, the concentration of income in these top tenants should be monitored for tenant diversification and potential sector-specific risks.
WINTER PARK, Fla., Jan. 04, 2024 (GLOBE NEWSWIRE) -- Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company”) today announced its 2023 investment and disposition activities and provided a corporate update.
2023 Investment Activity
- During the year ended December 31, 2023, the Company acquired 14 net lease retail properties for total acquisition volume of
$82.9 million , representing a weighted average going-in cash cap rate of7.4% . Acquisitions completed during the year had a weighted average remaining lease term of 8.7 years and approximately66% of annualized base rents are from a tenant or the parent of a tenant with an investment grade credit rating. - During the year ended December 31, 2023, the Company originated three first mortgage structured investments totaling
$38.6 million at a weighted average initial yield of9.1% . - The Company’s total investment activity for the year ended December 31, 2023, which includes its acquisition and structured investment activities, totaled
$121.5 million at a weighted average initial investment yield of7.9% . - During the fourth quarter of 2023, the Company acquired two net lease retail properties for total acquisition volume of
$3.0 million , representing a weighted average going-in cash cap rate of7.3% . Acquisitions completed during the fourth quarter had a weighted average remaining lease term of 9.6 years and100% of annualized base rents are from a tenant or the parent of a tenant with an investment grade credit rating. - During the quarter ended December 31, 2023, the Company originated two first mortgage structured investments totaling
$30.8 million at a weighted average initial yield of9.2% . - The Company’s total investment activity during the fourth quarter of 2023 totaled
$33.8 million , representing a weighted average initial investment yield of7.9% .
2023 Disposition Activity
- During the year ended December 31, 2023, the Company sold 24 net lease properties for total disposition volume of
$108.3 million , at a weighted average exit cap rate of6.3% . The sale of the properties generated aggregate gains of$9.3 million . - During the fourth quarter of 2023, the Company sold two net lease properties for a total disposition volume of
$8.7 million , representing an exit cap rate of7.3% .
2023 Capital Markets and Balance Sheet Highlights
- During the year ended December 31, 2023, the Company repurchased 899,011 common shares at a weighted average gross price of
$16.23 per share, for a total cost of$14.6 million . As of December 31, 2023, the Company had approximately$0.8 million remaining on its current common stock buyback program. - During the fourth quarter of 2023, the Company repurchased 594,790 common shares at a weighted average gross price of
$16.01 per share, for a total cost of$9.5 million . - During the year ended December 31, 2023, the Company issued 665,929 common shares under its ATM offering program at a weighted average gross price of
$18.96 per share, for total net proceeds of$12.4 million . - As of December 31, 2023, there were 14,883,061 shares of common stock and operating partnership units outstanding.
- The Company currently has no debt maturities until 2026.
Year-End 2023 Portfolio Update
- As of December 31, 2023, the Company owned 138 net lease properties representing
$38.7 million of annualized base rent. - The Company’s portfolio at year-end 2023 had a weighted average remaining lease term of 7.0 years and approximately
65% of annualized base rents are from a tenant or the parent of a tenant with an investment grade credit rating. - The Company’s top five tenants based on total annualized base rent are Walgreens, Lowe’s, Dick’s Sporting Goods, Dollar Tree/Family Dollar, and Dollar General. All top five tenants maintain investment grade credit ratings.
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 predominantly 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.
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, illiquidity of real estate investments and potential damages from natural disasters, the impact of the COVID-19 Pandemic and its variants on the Company’s business and the business of its tenants and the impact 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, 2022, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 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.
The Company defines “Annualized Base Rent” or “ABR” as the annualized straight-line in-place base rent required by the tenant’s lease as of December 31, 2023. 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 real estate investment trusts.
| Contact: | Matthew M. Partridge |
| Senior Vice President, Chief Financial Officer & Treasurer | |
| (407) 904-3324 | |
| mpartridge@alpinereit.com |
