Alpine Income Property Trust Raises 2026 AFFO Guidance

Alpine Income Property Tr (NYSE: PINE ) reported second-quarter financial results on Friday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Alpine Income Property Trust reported a 19.6% increase in AFFO per diluted share compared to the same quarter last year, with total investments for the year exceeding $300 million, setting a new company record. The company raised its full year 2026 AFFO guidance due to increased investment volume, now expecting AFFO per share between $2.20 and $2.22. A significant acquisition was announced, involving a $117.3 million industrial portfolio, marking a strategic diversification albeit not a primary focus for the company.

The property portfolio's occupancy stood at 99.6% with a weighted average lease term of 8.7 years, highlighting strong operational metrics. Management emphasized a conservative approach to leverage, with disposals and strategic refinancing plans to manage debt levels effectively. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the Alpine third quarter 2026 earnings conference call.

At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please be advised today's conference is being recorded. I would like to turn the conference over to your speaker today, Jenna McKinney. Please go ahead.

Jenna McKinney (Investor Relations) Thank you. Joining me and participating on the call this morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the executive team who will be available to answer questions during the call. As a reminder, many of our comments today are considered forward-looking statements under federal securities laws. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements.

Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company's Form 10-K, Form 10-Q and other SEC filings. You can find our SEC reports, earnings release and most recent investor presentation, which contain reconciliations of the non-GAAP financial measures we use, on our website at With that, I will turn the call over to John. John Albright (President and Chief Executive Officer) Thank you, Jenna, and good morning, everyone. We're pleased to report another strong quarter.

AFFO per diluted share grew 19.6% over the third quarter of last year and we invested approximately $41 million at a weighted average initial yield of 8.5%. Our investment activity has accelerated meaningfully this year, including our pending $117.3 million industrial portfolio acquisition, which I'll discuss in a moment. Our closed and under contract investments year to date now exceed $300 million, a company record that surpasses our full year 2025 total of $277 million. As a result of this investment volume, we are raising our full year 2026 AFFO guidance, which Phil will walk through shortly.

Starting with acquisitions, during the quarter we closed $39.2 million of property acquisitions at a weighted average initial cash cap rate of 8.5%. Key tenants included a Best Buy in McAllen, Texas, a Lowe's in Fairfax, Virginia, a Dick's Sporting Goods in Asheville, North Carolina, which are all investment grade rated and among our top five tenants by ABR. Year to date we've closed on $85.8 million of property acquisitions at a weighted average initial cap rate of 8%. We continue to target well-located properties we can buy at low basis at attractive initial yield, and we look to selectively recycle lower-yielding properties into new higher-yielding opportunities.

Subsequent to quarter end, we acquired a Burlington in Chandler, Arizona for $7.9 million and earlier this month announced an agreement to acquire a 13-property industrial portfolio for $117.3 million, or approximately $63 per square foot. The industrial portfolio totals about 1.9 million square feet across 11 states. It is 100% leased to nine tenants on an absolute triple-net basis with annual rent escalations, a weighted average remaining lease term of 10.2 years, and no expirations before late 2031. While industrial is not a strategic focus, this portfolio stood out for a few reasons.

First, it offers an attractive initial yield. Second, the tenant base is diversified and tenants have operated at their sites for an average of 40 years and invested significant capital in them. Third, we believe in-place rents are below market and benefit from annual escalations. We expect to close in the middle of the fourth quarter, subject to customary closing conditions.

The new financing Phil will discuss gives us ample capacity to fund it. At quarter end, our property portfolio consisted of 130 properties totaling 4.8 million square feet across 31 states with 99.6% occupancy and a weighted average lease term of 8.7 years. Approximately 68% of ABR comes from credit-rated tenants and 56% from investment grade rated tenants. On our commercial loan portfolio, we received early payment in full on two loans totaling $17.9 million at a weighted average yield of 10.2%.

At quarter end, the portfolio consisted of 11 loans with outstanding face amount of $160.1 million and a weighted average coupon, including PIK interest, of 13.4%. The loan book is near our target of approximately 20% of total undepreciated asset value. It complements our property portfolio and increases the overall yield on our investments. As a reminder, the timing of fundings and repayments can cause the relative size of the loan portfolio to vary from quarter to quarter.

With that, I'll turn the call over to Phil. Philip Mays (Chief Financial Officer) Thanks, John. Starting with our results, third quarter total revenue was $20.5 million, including lease income of $12.8 million and interest income from commercial loan investments of $7.6 million. FFO and AFFO were both $0.55 per diluted share, up approximately 20% from the third quarter of last year.

As a reminder, second quarter results included approximately $0.02 per diluted share of non-recurring termination fee income. This quarter did not include any one-time or non-recurring income. For the nine months ended September 30, total revenue was $58.9 million, including lease income of $38.1 million and interest income from commercial loan investments of $20.7 million. FFO and AFFO were $1.65 and $1.66 per diluted share, both up approximately 23% from the same period last year.

Turning to the balance sheet, during the quarter we raised $8.2 million of net proceeds through our common and preferred ATM programs. Year to date, we have now raised approximately $70 million of net proceeds across both programs. We ended the quarter with net debt to pro forma adjusted EBITDA of 6.5 times. While this is consistent with last quarter, it is more than a full turn lower than the 7.7 times we reported a year ago.

As of quarter end, we had $398.5 million of debt outstanding at a weighted average interest rate of 4.48% and no debt maturing until 2029. As previously disclosed, we have $100 million of SOFR swaps at 2.05% that mature in January 2027 and will be replaced with swaps fixing SOFR at 3.54%. Notably, subsequent to quarter end, we received bank commitments for a new $100 million four-year term loan and a $75 million increase to our revolving credit facility. We expect this financing to close in late October and will use the term loan proceeds to reduce borrowings outstanding on our revolving credit facility.

In total, this financing adds $175 million of potential liquidity. Now, turning to guidance: as John said, our investment volume has led us to raise guidance for full year 2026. We are raising our FFO outlook to $2.19 to $2.21 per diluted share, up from $2.10 to $2.13. We are raising our AFFO outlook to $2.20 to $2.22 per diluted share, up from $2.12 to $2.15.

At the midpoint, this represents approximately 17% AFFO per share growth over 2025. Our new guidance ranges reflect our increased investment volume assumption of $310 million to $350 million. Further, they reflect the expected timing of investments, dispositions and financing activity, as well as this quarter's $17.9 million of early loan repayments John discussed, and a $7.4 million loan with a 10.25% yield maturing in the fourth quarter. Finally, based on equity issued this quarter, our quarterly base management fee run rate is now approximately $1.5 million.

With that, operator, please open the call to questions. OPERATOR Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered or you wish to remove yourself from the queue, press star 11 again.

We will pause for a moment while we compile our Q&A roster. Our first question comes from Jay Cornreich with Cantor Fitzgerald. Your line is open. Jay Cornreich (Analyst) Hey, thanks.

Good morning. I was wondering if you could just give any further details on the industrial portfolio you announced the acquisition of, if there's anything further along, what the yield was on it, and more specifically, just in terms of how you anticipate financing it and if there's any maybe guidelines around what you think pro forma leverage might be. John Albright (President and Chief Executive Officer) Hey Jay, it's John. Thanks for the question.

I'll let Phil talk about the financing aspects of it. Because it's under contract, we haven't closed yet. We'll probably save more details until after it closes, but obviously we've given a fair amount of detail on our investor deck on it without having been closed. But we love the portfolio because it is higher yielding.

It has a nice wall of over 10 years. It has annual escalations. It's dispersed in 13 properties, nine tenants, and incredibly low rental rate per square foot. So it fits all the boxes of things that we like to buy where there's good yield and limited downside and nice upside.

But Phil, you want to talk about the financing side? Philip Mays (Chief Financial Officer) Yeah. Hey, Jay. So next week we should close on our new financing that's disclosed in the earnings release: new term loan, four-year term loan for $100 million, for which the proceeds will be used to pay down the line.

And then we're actually growing the line and hitting the accordion there to increase the line $75 million. So we'll initially take it down on the line. On debt to EBITDA, just if you want to look at that solely by itself, we go from mid-sixes to low-sevens, probably 7.3-ish. And then we'll look at—we still have some room in our dispo guidance and all—to get back down later.

Jay Cornreich (Analyst) Okay, appreciate that. That's helpful. And then maybe just more broadly, the industrial portfolio acquisition brings some incremental diversity to the otherwise largely retail portfolio. So just wondering how you're thinking about what the ideal makeup of your portfolio is going forward.

Are you targeting more industrial or other asset classes, or was this transaction really just more of a one-off? John Albright (President and Chief Executive Officer) For right now, it's basically a one-off. But we had mentioned in our previous earnings calls that we were open to other sectors, and so finding that great risk-adjusted yield in sectors. And as you know, we already have industrial property in our portfolio before this acquisition.

So I don't see anything else in sort of the window kind of like what we're looking at, but we're open to it. Jay Cornreich (Analyst) Okay. All right, I'll hold it there. Thank you.

OPERATOR Thank you. One moment for our next question. Our next question comes from Matthew Erdner with Jones. Your line is open.

Matthew Erdner (Analyst) Hey, good morning, guys, and thanks for taking the question. I'd like to touch on the loan portfolio a little bit and kind of the plans with that capital as it does start to run off. Do you look to keep that portfolio at or near 20%, or should we expect to see some of that capital kind of redeployed into properties? And then, on top of that, towards the end of the quarter, shares started trading down, which could present an attractive repurchase opportunity.

So how do you guys kind of balance the three of those? John Albright (President and Chief Executive Officer) Yeah, thanks. So on the loan book, it's not a hard set as far as an amount that we'll have out there. So there could be a situation where the loan book pays down, pays off, and we don't replace it to the amount it is now.

But I will say in this environment, we are seeing interesting opportunities to replace the loans that we have. So, you know, nothing right now, but certainly this is a good environment where to get really terrific sponsors, terrific assets, great locations, great basis. So I would expect that there'll be more opportunities, but it could be a situation where it does pay down. In any way, that's kind of where we are with the loan book.

Matthew Erdner (Analyst) Got it. Appreciate that. And then looking at dispositions, are there any credits that you guys may look to move on from in, call it, '27 as we continue to go forward? John Albright (President and Chief Executive Officer) Yeah, I mean, we're constantly, as you know, pruning the portfolio.

And of course we have, you know, some Walgreens left, but their credit gets better and we're just kind of cash flowing those out until, you know, find that 1031 buyer. And, you know, we have an At Home, as you know, but the At Home is in Charlotte in a terrific location. We had another user that wanted to buy it and At Home didn't want to leave. So, you know, the locations that we have are really strong.

We have one Sportsman's Warehouse where we have someone that wants to buy that. The Party City in Long Island, we're far along on a lease to replace that. So we're always pruning, but nothing. Matthew Erdner (Analyst) Got it.

Thank you, guys. OPERATOR One moment for our next question. Our next question comes from RJ Milligan with Raymond James. Your line is open.

Thanks. RJ Milligan (Analyst) Good morning, guys. John, maybe you could just give some comments on what you're seeing in terms of maybe a shift in cap rates, or if you're seeing the market move at all, just given the higher interest rate environment. John Albright (President and Chief Executive Officer) Sure.

I mean, clearly we're saving our capital for really good opportunities where we are getting that higher yield potential. So, you know, we're going to be targeting sort of that 8-cap, plus or minus. And, you know, I would say that people who are out in the market right now selling something, that means they want to clear the deck. So you probably have in this environment people that are going to sell, going to transact no matter what versus a market where, you know, they're seeing better pricing and they're taking something out to market.

So this is the time that gets us excited. So hopefully we'll have some good hunting here. RJ Milligan (Analyst) Thanks for that. And Phil, just given the new debts or the new financings and then the swap burn-offs, is there any way to quantify what the potential impact is next year as we think about the higher rates and the swap burn-off?

Philip Mays (Chief Financial Officer) Yeah. There's two swaps, RJ, that expire both in January. One is for $100 million at close, and I talked about it in my prepared remarks, around 200 basis points. So it's going to roll.

We have a forward swap in place that will replace it that is below market but higher than the 200 that that swap was at. So that $100 million will roll up about 150 basis points. And then the only other swap we have burning off is $50 million, and it also matures in January. We do not have a forward to replace it, but it's closer to market.

It's maybe 50 bps below market. So that one won't—it's smaller, it's $50 million—and it's closer to market, so that one will have a little sting, but not as much. Those are the two biggest moving parts on our rates for next year. RJ Milligan (Analyst) Okay.

Great. Thanks, guys. Philip Mays (Chief Financial Officer) Thank you. OPERATOR One moment for our next question.

Our next question comes from Michael Goldsmith with UBS. Your line is open. Michael Goldsmith (Analyst) Good morning. Thanks a lot for taking my question.

Just obviously, big industrial portfolio, and yet the implied fourth quarter guidance is sort of similar to the third quarter AFFO per share. So can you kind of bridge the moving pieces from the third quarter to the fourth quarter? And then, is that like $0.55, like, the right runway to think about just kind of going forward, I guess, building off of that last question? Philip Mays (Chief Financial Officer) Yeah.

Hey, Michael, it's Phil. So in the quarter, as we noted—John noted—we had a couple of loans that paid off. And then in the fourth quarter, if you look at our loan schedule, there's one for $7 million, $8 million, it's also scheduled to pay off. In addition to that, we do have the rate that adjusts down on the large residential loan.

So the $0.55 in the third quarter, if you kind of adjust for all that, just the loan activity, you know, it probably falls back to, call it, $0.53 or so. And then with the acquisitions we announced, in particular the industrial portfolio, you know, that will kind of replace it.