Alpine Income Property Trust Announces Sale of a Senior Portion of First Mortgage Loan Investment
Alpine Income Property Trust (NYSE: PINE) announced the sale of a $13.6 million A-1 participation interest in its $23.4 million loan investment secured by 39 retail properties. The Portfolio Loan, originally $24 million at an 8.75% interest rate, was reduced following the sale of two properties. The Company retained approximately $9.8 million at an interest rate of 9.94%. Proceeds from the sale were used to reduce PINE’s revolving credit facility balance. The senior participation will be repaid first from the sale of any Loan Collateral properties. The Portfolio Loan was rated A- by an independent agency.
- Sold $13.6 million A-1 participation interest in Portfolio Loan.
- Remaining investment in Portfolio Loan at $9.8 million with a 9.94% interest rate.
- Proceeds from sale used to pay down revolving credit facility.
- Portfolio Loan rated A- by an independent rating agency.
- Portfolio Loan secured by 39 retail properties.
- Reduction in Portfolio Loan from $24 million to $23.4 million due to property sales.
- Interest rate for remaining loan balance increased compared to initial rate (9.94% vs. 8.75%).
- Dependent on future property sales for repayment of senior participation.
Insights
The sale of a $13.6 million A-1 participation interest in Alpine Income Property Trust's $23.4 million loan investment is a strategic move. By selling a senior portion of the loan, PINE effectively reduces its credit exposure while obtaining liquidity to pay down its revolving credit facility balance. This transaction also results in an increased interest rate on the remaining loan balance, now approximately 9.94%, enhancing income generation from the remaining $9.8 million investment.
From a financial perspective, this maneuver can be interpreted positively. It indicates prudent risk management while maintaining a high yield on the remaining loan balance. The independent A- rating of the loan participation underscores the quality of the collateral and the low-risk profile of the loan, which could attract more investors and support the company's stock price.
Retail investors should note that this sale could enhance the company's near-term liquidity position, enabling further accretive reinvestment opportunities. However, it's essential to monitor how effectively PINE reinvests the proceeds to ensure ongoing growth and returns.
From a real estate investment standpoint, the reduction in the number of retail properties from 41 to 39 within the portfolio may signify a slight shift in asset composition. The sale of properties can provide liquidity and reduce debt, but it also means fewer assets generating rental income. The priority repayment structure for the senior participation interest ensures that PINE minimizes risk exposure from potentially underperforming assets.
Given the nature of retail properties, which can be volatile depending on market conditions and tenant performance, this move aligns with a cautious and strategic approach. The A- rating by an independent agency further alleviates concerns about the quality of the remaining collateral, demonstrating that the properties continue to meet high standards of creditworthiness.
Investors should consider the long-term implications of this sale on rental income and overall portfolio performance. If PINE can successfully reinvest the proceeds into high-yield and stable assets, the transaction will likely prove beneficial.
WINTER PARK, Fla., June 03, 2024 (GLOBE NEWSWIRE) -- Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company” or “PINE”) announced today that it has sold a
PINE originated the Portfolio Loan in November 2023 as a
“Proceeds from the sale of the senior portion on our first mortgage investment were used to pay down PINE’s revolving credit facility balance, and we continue to seek accretive reinvestment opportunities,” said John P. Albright, the Company’s President and Chief Executive Officer.
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 properties that are predominately 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, 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.
| Contact: | Lisa M. Vorakoun Senior Vice President, Chief Accounting Officer and Interim Chief Financial Officer and Treasurer (386) 944-5641 lvorakoun@alpinereit.com |
FAQ
What did Alpine Income Property Trust announce on June 3, 2024?
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How was the Portfolio Loan rated by the independent rating agency?
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