Alpine Income Property Trust Announces Acquisition of Lowe’s Home Improvement

Rhea-AI Summary

Alpine Income Property Trust (NYSE: PINE) has announced the acquisition of a Lowe's Home Improvement property and its 2024 investment activities. The company completed a $22.5 million purchase of a Lowe's property in Knoxville, TN with approximately 13 years remaining on the lease. Lowe's (BBB+ rated) becomes PINE's second-largest tenant by annual base rent after Dick's Sporting Goods.

For full-year 2024, PINE's investments totaled $134.7 million with a weighted average initial yield of 8.7%. The company's portfolio now includes 51% of annual base rent from investment-grade rated tenants. Disposition activity for 2024 reached $75.6 million at a weighted average exit cash cap rate of 6.6%, including the sale of properties leased to Mountain Express, Walgreens, and AutoZone for $5.4 million in December. The company's weighted average remaining lease term improved to 8.8 years from 7.0 years at the start of 2024.

Positive

• Acquisition of Lowe's property with 13-year lease term strengthens tenant quality
• High investment yield of 8.7% on $134.7M of investments
• 51% of annual base rent now from investment-grade rated tenants
• Improved portfolio lease term from 7.0 to 8.8 years
• Successful execution of $75.6M in dispositions at 6.6% cap rate

Negative

• Large investment volume of $134.7M relative to market cap indicates significant capital deployment risk
• Concentration risk with Lowe's becoming second-largest tenant

Insights

Financial Analyst

<p>The acquisition of a <money>$22.5 million</money> Lowe's property and the full-year investment activity of <money>$134.7 million</money> at an <percent>8.7%</percent> weighted average initial yield demonstrates PINE's aggressive portfolio expansion strategy. The <money>$75.6 million</money> in dispositions at a <percent>6.6%</percent> exit cap rate shows profitable portfolio optimization, creating a <percent>2.1%</percent> spread between acquisition and disposition yields.</p><p>The strategic shift from Walgreens to higher-quality tenants like Dick's Sporting Goods (BBB) and Lowe's (BBB+) strengthens the portfolio's credit profile. The extension of weighted average lease term from 7.0 to 8.8 years reduces near-term lease renewal risk. With <percent>51%</percent> of ABR now from investment-grade tenants, PINE has successfully improved its tenant quality while maintaining attractive yields in a challenging market.</p>

Real Estate Investment Analyst

<p>The Knoxville Lowe's acquisition with a 13-year lease term aligns with prime net lease investment criteria - long-term, investment-grade tenant in a strong retail market. The transaction metrics reveal PINE's ability to source deals with favorable cap rate spreads, particularly noteworthy given the current high interest rate environment.</p><p>The strategic disposal of convenience store and pharmacy assets shows prudent risk management, reducing exposure to sectors facing headwinds from e-commerce and changing consumer behaviors. The portfolio restructuring has effectively increased the average property value and tenant credit quality while maintaining an attractive yield profile, positioning PINE for more stable long-term performance.</p>

Full Year Investment Activity Reached $134.7 Million; Dispositions Totaled $75.6 Million

WINTER PARK, Fla., Jan. 02, 2025 (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 the acquisition of a property leased to Lowe’s Home Improvement, and updated fourth quarter and full year 2024 investment and disposition activity. 

2024 Investment Activity 

• Completed a $22.5 million purchase of a single-tenant property leased to Lowe’s Home Improvement located in Knoxville, TN in December 2024. The lease has approximately 13 years of remaining term.
• Lowe’s (S&P rating: BBB+) is now the Company’s second largest tenant based on annual base rent (“ABR”) after Dick’s Sporting Goods (S&P rating: BBB).   
• Full year 2024 investments, including acquisitions and structured investment activity, totaled $134.7 million at a weighted average initial investment yield of 8.7%.
• Approximately 51% of ABR is from investment grade rated tenants at year end 2024.

2024 Disposition Activity 

• Sold one former Mountain Express convenience store, a single-tenant Walgreen’s and a single-tenant AutoZone property for $5.4 million in December 2024.
• After accounting for the recently sold properties, Walgreens has decreased to the Company’s fourth largest tenant based on ABR, from its largest tenant at the beginning of 2024.
• 2024 disposition volume, inclusive of property and structured investment sales, totaled $75.6 million at a weighted average exit cash cap rate of 6.6%. 
  

CEO Comments

“We continued to execute on our strategy to grow with strong tenants, investing over half of our market capitalization in high-quality properties and investments located in strong markets at compelling investment yields during 2024,” said John P. Albright, President and Chief Executive Officer of Alpine Income Property Trust. “Furthermore, our active portfolio management achieved significant progress, including decreasing the Company’s exposure to Walgreens and increasing the weighted average remaining lease term to 8.8 years from 7.0 years at the beginning of 2024.”

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 predominately leased to high-quality publicly traded and credit-rated tenants.

Contact:		Philip R. Mays Senior Vice President, Chief Financial Officer and Treasurer (407) 904-3324 pmays@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 “continued,” “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, credit risk associated with the Company investing in first mortgage investments, illiquidity of real estate investments and potential damages from natural disasters, the impact of epidemics or pandemics (such as the COVID-19 Pandemic and its variants) on the Company’s business and the business of its tenants and the impact of such epidemics or pandemics 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, 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. 

FAQ

What was the value of PINE's Lowe's Home Improvement acquisition in December 2024?

PINE acquired the Lowe's Home Improvement property in Knoxville, TN for $22.5 million in December 2024.

What was PINE's total investment volume for 2024?

PINE's total investments, including acquisitions and structured investment activity, reached $134.7 million in 2024.

What percentage of PINE's annual base rent comes from investment-grade tenants in 2024?

Approximately 51% of PINE's annual base rent comes from investment-grade rated tenants at year-end 2024.

How much did PINE's property dispositions total in 2024?

PINE's disposition volume totaled $75.6 million at a weighted average exit cash cap rate of 6.6% in 2024.

How did PINE's weighted average remaining lease term change in 2024?

PINE's weighted average remaining lease term improved to 8.8 years from 7.0 years at the beginning of 2024.