FFO: $0.45 per diluted share, up 22% from $0.37 in Q3 2023.
AFFO: $0.44 per diluted share, up 16% from $0.38 in Q3 2023.
Total revenue: $13.5 million (includes $11.7 million in lease income and $1.7 million in interest income from commercial loans).
Property Acquisitions: Acquired four net lease properties for $37.5 million at a weighted average initial cap rate of 8.8%.
Property Sales: Eight properties were sold for $48.6 million at a weighted average cash cap rate of 6.8%, resulting in a total gain of $3.4 million.
Loan Portfolio: Total balances of $43.2 million at a weighted average yield of 10.4%.
Capital Raising: $11.1 million through the Common ATM Program.
Net debt to EBITDA: improved to 6.9x from 7.4x in the previous quarter.
Quarterly Dividend: AFFO payout ratio is now 64%, increasing from $0.275 to $0.28 per share.
Full-year 2024 FFO guidance: Increased to a range of $1.67 to $1.69 per share.
Full-year 2024 AFFO guidance: Increased to a range of $1.69 to $1.71 per share.
Investment guidance: increased to $100 million to $110 million range.
Disposition Guidance: Adjusted to range of $70 million to $75 million.
Release date: October 18, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
Alpine Income Property Trust Inc (NYSE:PINE) reported strong third-quarter earnings growth, with FFO up 22% and AFFO up 16% compared to the same period last year.
The company successfully increased asset recycling, acquiring four net lease properties for $37.5 million at a weighted average initial cap rate of 8.8%.
PINE has reduced its exposure to Walgreens, which has declined from its largest tenant concentration to its second largest tenant concentration, and plans to continue to reduce this exposure.
The company increased its quarterly dividend from $0.275 to $0.28 per share, reflecting increased revenue and a healthy AFFO payout ratio of 64%.
PINE raised its full-year 2024 outlook and investment guidance for FFO and AFFO, demonstrating confidence in its continued growth and performance.
Minus points
Some of the properties acquired in the Tampa Bay area were damaged in recent hurricanes, but are expected to reopen by the end of the year or early next year.
Recent acquisitions have increased the company’s exposure to non-investment grade tenants, which may pose higher risks compared to investment grade tenants.
There are concerns about potential credit losses, especially for tenants like At Home, which has troubled balance sheets.
The GAAP treatment of certain transactions, such as sale-leasebacks, resulted in some discrepancies in reported revenue, which could cause confusion.
The company’s net debt to EBITDA ratio is relatively high at 6.9x, but it has improved from the previous quarter.
story continues
Q&A highlights
Q: Can you talk about the trading environment and increased activity in the third quarter? A: President and CEO John Albright described an improved liquidity environment and increased acquisition opportunities. did. The company actively bids on acquisitions and financing investments to find assets with favorable risk/reward profiles.
Q: Can you tell me more about the insurance arrangements for hurricane-damaged properties in Tampa? A: John Albright says these properties come with two years of business interruption insurance and full replacement insurance. said. Operating companies are working to reopen restaurants as soon as possible, and pent-up demand is expected due to reduced competition.
Q: How do you manage the impact of your loan portfolio on earnings, given the potential for lumpiness? A: John Albright says his goal for his loan portfolio is around 10% of total enterprise value. I said that there is. The company is open to scaling as quality opportunities arise, while maintaining relationships with developers for future deals.
Q: What is your current exposure to Walgreens and how do you plan to manage it? A: John Albright has an average lease term of 7.6 years for Walgreens, the closest He said the deadline is six years from now. The company has been aggressively reducing its exposure, selling two Walgreens properties and taking bids on other properties.
Q: How do you view the current macro environment and its potential impact on credit losses? A: John Albright is taking proactive steps to mitigate potential issues. said its portfolio is in good condition. The only concern is At Home, which has problems with its balance sheet, but the company is confident it can resolve any issues.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.