FrontView REIT's Q1 2025: Unraveling Contradictions in Bad Debt Guidance and Asset Recycling Strategy
Earnings DecryptWednesday, May 21, 2025 3:34 am ET

Bad debt guidance and recovery expectations, recycling strategy and focus on asset selection are the key contradictions discussed in FrontView REIT's latest 2025Q1 earnings call.
Acquisitions and Capital Allocation:
- FrontView REIT, Inc. acquired approximately $49.2 million of properties in Q1 2025 at an average cap rate of 7.9%.
- The company has slowed its acquisition activity due to a challenging cost of capital, planning to acquire between $125 million and $145 million for the year.
- They continue to seek acquisitions at elevated cap rates, as they believe these assets are being acquired at historically high levels.
Portfolio Management and Lease Replacements:
- FrontView REIT reported having 12 properties with tenants in financial distress, representing approximately 4% of year-end 2024 ABR.
- The company has successfully sold one asset and has contracts to sell another, with lease negotiations ongoing for replacements.
- They expect the replacement leases will generate rental income close to the previous levels, contributing to a projected bad debt expense of between 1% to 2%.
Dividend and Shareholder Returns:
- The company declared a quarterly dividend of $0.215 per share, aiming to balance shareholder returns with reinvestment in growing the portfolio.
- The dividend is part of the company's strategy to maintain a strong balance sheet while providing capital returns to shareholders.
Cost of Capital and Liquidity:
- FrontView REIT recently locked in a $200 million term loan for three years at a SOFR rate of 3.66%, improving their borrowing cost.
- The company ended Q1 2025 with approximately $141 million of liquidity, anticipating sufficient borrowing capacity for investment activity.
FVR Total Revenue YoY, Total Revenue
Acquisitions and Capital Allocation:
- FrontView REIT, Inc. acquired approximately $49.2 million of properties in Q1 2025 at an average cap rate of 7.9%.
- The company has slowed its acquisition activity due to a challenging cost of capital, planning to acquire between $125 million and $145 million for the year.
- They continue to seek acquisitions at elevated cap rates, as they believe these assets are being acquired at historically high levels.
Portfolio Management and Lease Replacements:
- FrontView REIT reported having 12 properties with tenants in financial distress, representing approximately 4% of year-end 2024 ABR.
- The company has successfully sold one asset and has contracts to sell another, with lease negotiations ongoing for replacements.
- They expect the replacement leases will generate rental income close to the previous levels, contributing to a projected bad debt expense of between 1% to 2%.
Dividend and Shareholder Returns:
- The company declared a quarterly dividend of $0.215 per share, aiming to balance shareholder returns with reinvestment in growing the portfolio.
- The dividend is part of the company's strategy to maintain a strong balance sheet while providing capital returns to shareholders.
Cost of Capital and Liquidity:
- FrontView REIT recently locked in a $200 million term loan for three years at a SOFR rate of 3.66%, improving their borrowing cost.
- The company ended Q1 2025 with approximately $141 million of liquidity, anticipating sufficient borrowing capacity for investment activity.

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