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Alpine Income Property Trust, Inc. (PINE)·Q4 2024 Earnings Summary

Executive Summary

  • Delivered Q4 2024 FFO and AFFO of $0.44 per diluted share (up 19% and 16% YoY, respectively, per management), on total revenue of $13.79M; GAAP diluted EPS was $(0.06), reflecting impairment and loss on disposition items .
  • Full-year 2024 FFO/AFFO per diluted share were $1.73/$1.74, up 18%/17% YoY, supported by $134.7M of total investments at an 8.7% yield and $75.6M of dispositions at a 7.1% cap rate .
  • Initiated 2025 guidance: FFO and AFFO per diluted share of $1.70–$1.73, with $50–$80M of investments and $20–$30M of dispositions; guidance embeds an ~$0.08/share headwind from a Party City bankruptcy-related vacancy and a Reno theater non-renewal .
  • Capital updates: Dividend raised to $0.285 for Q1 2025 (from $0.280) and new $10M share repurchase authorization announced post-quarter; net debt/Pro Forma Adjusted EBITDA at 7.4x with $95.1M of liquidity at year-end .

What Went Well and What Went Wrong

  • What Went Well

    • Executed accretive recycling: $134.7M of investments at 8.7% yield and $75.6M of dispositions at 7.1% cap rate; reduced Walgreens exposure and increased WALT to 8.7 years .
    • Earnings and dividend growth: AFFO per share up 17% in 2024, enabling another dividend increase to $0.285 for Q1 2025; management highlighted a “strong finish to an excellent 2024” .
    • Strengthening tenant mix: Investment-grade ABR at 51%, with DICK’S and Lowe’s now top tenants (each 10% of ABR), supporting portfolio quality and diversification .

  • What Went Wrong

    • GAAP loss in Q4: Diluted EPS of $(0.06) driven by impairment and loss on disposition; real estate expenses ticked up QoQ due to the Reno theater lease expiry in November .
    • Vacancy headwinds: 2025 guidance assumes an ~$0.08/share drag from a Party City bankruptcy-related vacancy and the non-renewed Reno theater until resolved/redeployed .
    • Leverage elevated: Net debt/Pro Forma Adjusted EBITDA at 7.4x (vs. 6.9x in Q3) despite liquidity of $95.1M; management intends to balance growth and leverage with ongoing recycling and ATM flexibility .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Millions)$12.49 $13.48 $13.79
GAAP Diluted EPS ($)$0.01 $0.21 $(0.06)
FFO per Diluted Share ($)$0.43 $0.45 $0.44
AFFO per Diluted Share ($)$0.43 $0.44 $0.44

Full-year 2024 summary:

  • Total Revenues: $52.23M; FFO: $1.73/share; AFFO: $1.74/share .

Portfolio KPIs

KPIQ3 2024Q4 2024
Properties (count)133 134
Annualized Base Rent (ABR) ($M)$41.5 $44.3
Weighted Avg Remaining Lease Term (years)8.8 8.7
Occupancy (%)99.1% 98.0%
Investment-Grade ABR (%)52% 51%
Net Debt / Pro Forma Adj. EBITDA (x)6.9x 7.4x

Notes:

  • Q4 GAAP loss reflected higher impairment and a loss on asset disposition; CFO also cited Reno lease expiry driving higher Q4 real estate expense .
  • Liquidity at 12/31/24: $95.11M (cash/revolver availability) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FFO per Diluted ShareFY 2025n/a$1.70–$1.73 New
AFFO per Diluted ShareFY 2025n/a$1.70–$1.73 New
InvestmentsFY 2025n/a$50M–$80M New
DispositionsFY 2025n/a$20M–$30M New
Wtd Avg Diluted SharesFY 2025n/a16.0M–16.5M New
Dividend per Share (Quarterly)Q1 2025$0.280 $0.285 Raised
Embedded Vacancy HeadwindFY 2025n/a~$(0.08)/share (Party City & Reno) New

Management context: If Party City is assumed and investments/loan originations execute on plan, results could be at the high end or above the range .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Investment pipeline and cap ratesQ3: Acquired $37.5M at 8.8% initial cash cap; total Q3 investments $55.3M at 9.2% yield . Q2: $20.7M invested at 9.5% yield .Pipeline “strongest we’ve seen” this time of year; acquisitions trending ~8% cap; higher-quality selectively (e.g., Lowe’s) .Improving opportunity set; selective quality tilt
Portfolio pruning (Walgreens, risk)Q3: Sold 8 properties incl. 2 Walgreens; Walgreens ABR down to 9% .Further Walgreens reduction; another sale likely; reallocating into higher-spread assets .Ongoing de-risking
Structured finance / loansQ3: Publix-anchored construction loan at 10.25%+ ladder; loans part of YTD $84.2M at 9.4% . Q2: Wawa-anchored loan at 11.5% .3 loans in 2024 at 10.7% avg yield; 2025 mix could be ~50/50 loans vs acquisitions .Steady to slightly lower yields; active
Leverage & liquidityQ3 net debt/EBITDA 6.9x; revolver $79.5M out; swaps in place .Year-end net debt/EBITDA 7.4x; 80%+ of debt swapped; $95M liquidity; may add swaps if revolver grows .Mixed (higher leverage; ample liquidity)
Vacancies / re-leasingNo specific vacancies highlighted; occupancy 99.1% in Q3 .Party City bankruptcy exposure (Oceanside, NY) and Reno theater non-renewal; ~$0.08/share headwind; optionality on lease/sell .Near-term headwind; monetization path identified

Management Commentary

  • Strategic message: “We achieved AFFO of $1.74 per diluted share for the year, representing growth of 17%,” enabling a dividend increase; total 2024 investments of $134.7M at 8.7% and dispositions of $62M at 6.9% (pruning, de-risking Walgreens) .
  • Portfolio positioning: “BBB-rated DICK’S Sporting Goods and BBB+ rated Lowe’s are now our 2 largest tenants, each representing 10% of ABR” .
  • Capital allocation “barbell” approach: combine investment-grade cash flow stability with higher-yielding opportunities; continue selective loan originations .
  • Guidance context: 2025 assumes ~$0.08/share impact from Party City and Reno; if Party City is assumed and pipeline executes, could hit high end or exceed .
  • Liquidity/hedging: 80%+ debt swapped, W.A. interest 4.1% at year end; potential additional swaps if revolver usage rises while retaining flexibility .

Notable quotes:

  • “The fourth quarter was a strong finish to an excellent 2024… AFFO … growth of 17%… raise our common dividend…” .
  • “We see an active and attractive pipeline… employ a barbell approach…” .
  • “Our initial earnings guidance for 2025 is… $1.70 to $1.73… assumes [Party City and Reno] impact… approximately $0.08” .

Q&A Highlights

  • Walgreens exposure reduction: Another Walgreens sale is likely; management is pairing dispositions with acquisitions to optimize capital redeployment .
  • Investment mix: Expect robust pipelines in both core acquisitions and loans; 2025 program could be roughly 50/50 between loans and acquisitions given yield/credit advantages in structured finance .
  • Loan maturities: Of four loans maturing in 2025, one likely pays off, three extend; expect balances to hold or grow later in the year .
  • Cap rates and quality: Going-in acquisition cap rates ~8%; selectively “dive down for quality” (e.g., Lowe’s) to showcase diversified, higher-quality credit exposure .
  • Vacancies monetization: Weighing lease-and-hold versus sale; leaning toward earlier monetization to redeploy into productive uses and offset earnings drag .
  • Expense cadence: No unusual/lumpy G&A expected in 2025; Q4 real estate expense increased due to Reno lease expiry .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 and FY 2025 could not be retrieved due to data access limits during this session; as a result, beat/miss versus consensus is not included. We will update this section with S&P Global consensus once available.
  • REIT context: Key earnings focus remains on FFO/AFFO per share and payout ratios; PINE reported Q4 FFO/AFFO of $0.44 with an AFFO payout ratio of ~64% (Q4 dividend $0.28) .

Key Takeaways for Investors

  • 2024 delivered double-digit AFFO/FFO per-share growth and portfolio quality upgrades (IG tenant ABR 51%; DICK’S and Lowe’s at 10% ABR each), supporting the dividend increase and portfolio resilience .
  • 2025 guidance embeds known vacancy headwinds (~$0.08/share); timely resolution (lease assumption/sale) plus pipeline execution could push toward the high end or above the range .
  • Accretive recycling remains core: dispositions (including Walgreens and potentially At Home select locations) funding higher-spread opportunities at ~8% cap rates or >10% loan yields .
  • Balance sheet: Liquidity of ~$95M at year end, 80%+ fixed debt, and no maturities until 2026 provide flexibility to pursue investments while managing leverage (7.4x net debt/EBITDA) .
  • Tactical capital actions: Dividend increased to $0.285 (Q1’25) and a new $10M buyback authorization post-quarter provide incremental tools amid potential volatility .
  • Near-term catalysts: Asset sales of Party City/Reno theater and redeployment, additional Walgreens pruning, and early-year investment closings (management expects more activity by end of Q1) .

Additional Detail

  • Q4 2024 Press Release: Revenue, EPS, FFO/AFFO, portfolio metrics, balance sheet, 2025 outlook .
  • Q4 2024 Call: Strategy, pipeline, guidance context, tenant/vacancy updates, cap rates, hedging plans .
  • Prior Quarters: Q3 and Q2 operating results and portfolio updates inform sequential and YoY trends .

Press Releases around the Quarter:

  • Q4 earnings announcement and 2025 outlook (Feb 6, 2025) .
  • Q4 earnings call scheduling (Jan 16, 2025) .
  • New $10M repurchase program (Feb 12, 2025) .