FrontView REIT's Q4 2024: Discrepancies in Financial Projections, Product Timelines, and Strategic Direction

These are the key contradictions discussed in FrontView REIT, Inc.'s latest 2024 Q4 earnings call, specifically including: Financial Projections, Product Launch Timelines, and Market Strategy:



Acquisition Activity and Cap Rate Trends:
- FrontView REIT acquired $103.4 million of properties at an average cap rate of 7.93% in Q4 2024, and an additional $55.9 million in Q1 2025 at an average cap rate of 7.8% to 8.25%.
- The company exceeded their Q1 '25 cap rate guidance by 40 to 45 basis points, reaching 7.9% to 7.95%, due to sourcing more accretively than expected in a slightly imbalanced marketplace.

Occupancy and Tenant Health:
- FrontView maintained a strong occupancy rate of 98%, with 7 assets vacant at the end of Q4 2024, and reported 98% rent-to-collections.
- The company is addressing tenant-related issues, including taking back or negotiating lease or sales for approximately 4% of their ABR, and plans to have most assets back online by late 2025.

Financial Performance and Guidance:
- FrontView reported AFFO per share of $0.33 in 2024, and provided a 2025 guidance range of $20 to $26.
- The guidance is based on real estate acquisitions between $175 million and $200 million, with a focus on maintaining a robust balance sheet to capitalize on growth opportunities.

Capital Structure and Debt Maturity:
- FrontView has no immediate debt maturities and recently locked in a $200 million term loan for three years at a SOFR rate of 3.66%, representing an all-in borrowing rate of 4.96%.
- The company's earnings are sensitive to short-term SOFR swings, and they continue to optimize their capital structure post-ABS note repayment.