Alpine Income Property Trust's 2024Q4: Navigating Contradictions in Walgreens Exposure, Asset Strategy, and Vacancy

These are the key contradictions discussed in Alpine Income Property Trust's latest 2024Q4 earnings call, specifically including: Walgreens exposure, at-home asset strategy, acquisition strategy, and vacancy status:



Strong Earnings and Dividend Growth:
- Pine achieved AFFO of $1.74 per diluted share for the year, representing a 17% growth, and successfully raised its common dividend to a new quarterly rate of $0.285.
- The growth in earnings and the dividend increase were driven by successful investment activity, free cash flow generation, and consistent execution of the business plan.

Property Acquisition and Investment:
- During the fourth quarter, Pine acquired 6 properties for $50.5 million at a weighted average cash cap rate of 7.6%, and the full year acquisition activity totaled 12 properties for $103.6 million at a weighted average cash cap rate of 8.2%.
- The strategic acquisitions included investment-grade rated tenants such as Best Buy, DICK'S Sporting Goods, and Lowe's, enhancing the company's WALT and ABR diversification.

Loan Origination and Yield:
- Pine originated 3 commercial loans during the year for $31.1 million at a weighted average yield of 10.7%, contributing to total investments of $134.7 million at an average yield of 8.7%.
- The company's loan portfolio benefits from constrained capital markets for developers, offering higher yields and reduced risk due to lower LTVs.

Divestiture and Capital Reinvestment:
- Pine sold $62 million of property at an average cap rate of 6.9%, pruning the portfolio to improve diversification and reduce risk, with notable divestitures including 3 Walgreens.
- The net proceeds from these dispositions were reinvested into new acquisitions, generating a positive yield spread.

Liquidity Management and Debt Profile:
- Pine ended the year with $95 million of liquidity, including $5 million of available cash and $90 million available under its revolving credit facility, with no debt maturing until 2026.
- The company's strong cash position supports strategic investments while maintaining a prudent leverage ratio, with debt maturities staggered and interest rates fixed through SOFR rate swaps.