Alpine Income Property Trust Announces Year-To-Date 2024 Transaction Activity

Rhea-AI Summary

Alpine Income Property Trust (NYSE: PINE) reported its 2024 year-to-date transaction activities. During Q2, the company acquired a two-tenant net leased retail property for $14.6 million, fully leased to Best Buy and Golf Galaxy, with an average lease term of 4.6 years. Additionally, Alpine originated a 15-month first mortgage investment of $6.1 million at an 11.5% initial yield. Cumulatively, year-to-date investment activity totaled $28.9 million at a 9.85% yield. On the disposition side, Alpine sold two properties for $6.6 million, realizing gains of $0.9 million. Including the previously disclosed $13.6 million sale of a portfolio loan participation, total sales amounted to $20.2 million at a 7.69% yield.

Positive

• Acquired a two-tenant net leased retail property for $14.6 million, fully leased to investment grade tenants, with an average lease term of 4.6 years.
• Originated a 15-month first mortgage structured investment totaling $6.1 million at an initial yield of 11.5%.
• Total year-to-date investment activity of $28.9 million at a weighted average initial investment yield of 9.85%.
• Sold properties generating $0.9 million in aggregate gains.
• Completed total investment sales of $20.2 million at a yield of 7.69%.

Negative

• None.

Insights

Financial Analyst

Alpine Income Property Trust's recent $28.9 million investment activity in the year-to-date 2024 reveals a strategic focus on acquiring properties with high-quality tenants such as Best Buy and Golf Galaxy. With a 9.85% weighted average initial investment yield, these acquisitions are poised to offer stable revenue streams, thanks to the investment-grade ratings of the tenants. Additionally, their structured investment yielding 11.5% represents a higher-risk, higher-reward profile, which could bolster overall returns if managed well.

The $6.6 million disposition activity at a 7.04% exit cap rate indicates a solid strategy to divest lower-yielding assets while recording $0.9 million in gains. These financial maneuvers suggest Alpine is optimizing its portfolio for better returns, balancing acquisitions with strategic sales.

In the short term, these activities may bolster Alpine's financial health and provide shareholders with improved dividend potential. However, the relatively short lease terms remaining on the new acquisitions (4.6 years) might pose renewal risks. Long-term success will depend on the company's ability to manage these expirations and maintain high occupancy rates.

Real Estate Market Analyst

Alpine's investments in properties leased to nationally recognized tenants like Best Buy and Golf Galaxy align with the current industry trend of securing stable and credit-worthy tenants. The retail segment, particularly net-leased properties, continue to be attractive due to their predictable income streams.

The acquisition of a 101,000 sq. ft. property and a $6.1 million structured investment indicates Alpine is diversifying within the retail space, not just in direct ownership but also in structured finance. This approach could provide higher yields but also carries inherent risks associated with loan collateral performance.

On the disposition front, the sale of properties with a 7.04% exit cap rate is noteworthy. This rate is relatively healthy compared to industry norms, suggesting Alpine is exiting non-core assets at favorable prices, which is a positive indicator of their portfolio management strategy.

WINTER PARK, Fla., June 21, 2024 (GLOBE NEWSWIRE) -- Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company”) today announced its year-to-date 2024 investment and disposition activities.

2024 Investment Activity

• During the second quarter, the Company acquired a two-tenant net leased retail property for $14.6 million. The property is 100% leased to investment grade rated tenants Best Buy and Golf Galaxy (Dick’s Sporting Goods) and has a weighted average remaining lease term of 4.6 years. The property is approximately 101,000 square feet and is situated on 7.38 acres.
• Additionally, during the quarter, the Company originated a 15-month first mortgage structured investment totaling $6.1 million at an initial yield of 11.5%. The Company funded approximately $4.6 million at loan origination. The underlying loan collateral consists of three retail outparcels leased or under letter of intent with a national convenience store and a national quick service restaurant located in Cincinnati, Ohio.
• The Company’s year-to-date total investment activity as of June 24, 2024, which includes its acquisition and structured investment activities, totaled $28.9 million at a weighted average initial investment yield of 9.85%.
  

2024 Disposition Activity

• During the second quarter, the Company sold two net lease properties, leased to Hobby Lobby & Festival Foods for total disposition volume of $6.6 million, at a weighted average exit cap rate of 7.04%. The sale of the properties generated aggregate gains of $0.9 million.
• Including the previously disclosed sale of the $13.6 million A-1 participation of its $24.0 million portfolio loan, the Company has completed total investment sales of $20.2 million at yield of 7.69%.

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:

Philip R. Mays Senior Vice President, Chief Financial Officer & Treasurer (407) 904-3324 pmays@alpinereit.com

FAQ

What did Alpine Income Property Trust disclose about its 2024 investment activities?

Alpine Income Property Trust disclosed acquiring a two-tenant net leased retail property for $14.6 million and originating a 15-month first mortgage investment totaling $6.1 million.

What properties did Alpine Income Property Trust sell in 2024?

In 2024, Alpine Income Property Trust sold two net lease properties leased to Hobby Lobby and Festival Foods for a total of $6.6 million.

What is the total year-to-date investment activity for Alpine Income Property Trust in 2024?

The total year-to-date investment activity for Alpine Income Property Trust in 2024 is $28.9 million at a weighted average initial investment yield of 9.85%.

How much did Alpine Income Property Trust generate from property sales in 2024?

Alpine Income Property Trust generated $20.2 million from property sales in 2024, including the previously disclosed $13.6 million sale of a portfolio loan participation.

What is the yield on Alpine Income Property Trust's 2024 property sales?

The yield on Alpine Income Property Trust's 2024 property sales is 7.69%.