Alpine Income Property Trust Delivers Strong Quarterly and Year-to-Date Results

Alpine Income Property Trust, a real estate investment trust (REIT) that owns and operates commercial properties, has reported impressive financial results for the third quarter and first nine months of 2024. The company’s performance demonstrates its ability to navigate the evolving real estate landscape and capitalize on strategic opportunities.

Robust Revenue Growth During the third quarter of 2024, Alpine Income Property Trust generated total revenues of $13.5 million, a 16.6% increase compared to the same period in 2023. This growth was driven by several factors:

• Lease Income: Lease income from the company’s property portfolio increased by 2.4% to $11.7 million, reflecting the impact of recent property acquisitions.
• Commercial Loans and Investments: Interest income from the company’s expanding portfolio of commercial loans and investments surged to $1.7 million, up from just $0.1 million in the prior-year quarter. This significant increase highlights Alpine’s successful diversification into this revenue stream.
• Other Revenue: The company reported $0.1 million in other revenue, primarily from a revenue-sharing agreement with its parent company, CTO.

The strong revenue performance continued into the first nine months of 2024, with total revenues reaching $38.4 million, a 12.8% increase compared to the same period in 2023.

Disciplined Cost Management Despite the revenue growth, Alpine Income Property Trust has maintained a disciplined approach to cost management. During the third quarter of 2024, the company’s total operating expenses decreased by 18.2% to $10.4 million, primarily due to a significant reduction in the provision for impairment.

• Real Estate Expenses: The direct costs of operating the company’s income properties increased by 6.9% to $1.8 million, in line with the increase in lease income.
• General and Administrative Expenses: The company’s general and administrative expenses rose by 11.6% to $1.8 million, driven by higher corporate legal and consulting fees.
• Provision for Impairment: The provision for impairment decreased from $2.9 million in the third quarter of 2023 to $0.4 million in the current quarter, reflecting improved asset quality and reduced credit risk.
• Depreciation and Amortization: Depreciation and amortization expense declined by 2.9% to $6.3 million, partially due to the classification of certain properties as commercial loans and investments, which do not require depreciation.

The company’s disciplined cost management is also evident in the first nine months of 2024, with total operating expenses decreasing by 3.0% to $30.7 million.

Successful Asset Recycling Alpine Income Property Trust has demonstrated its ability to effectively recycle its assets, optimizing its portfolio through strategic acquisitions and dispositions.

During the third quarter of 2024, the company acquired six properties for a combined purchase price of $53.1 million, including three properties acquired through a sale-leaseback transaction with a tenant repurchase option. Simultaneously, the company sold eight properties for an aggregate sales price of $48.6 million, generating $3.4 million in gains on the dispositions.

For the first nine months of 2024, the company acquired a total of six properties for $53.1 million and sold 10 properties for $55.2 million, generating $4.3 million in gains.

This active asset management strategy has allowed Alpine to enhance the quality and performance of its portfolio, while also generating additional capital for future investments.

Expanding Commercial Loans and Investments One of the standout aspects of Alpine Income Property Trust’s performance is its growing commercial loans and investments segment. As of September 30, 2024, the company’s commercial loan investments portfolio had a total carrying value of $86.5 million, comprising five construction loans, one mortgage note, and three properties acquired through a sale-leaseback transaction.

The interest income from this portfolio surged to $1.7 million in the third quarter of 2024, up from just $0.1 million in the same period last year. For the first nine months of 2024, interest income from commercial loans and investments reached $3.5 million, a significant increase from the $0.1 million generated in the prior-year period.

This expansion of the commercial loans and investments segment demonstrates Alpine’s ability to diversify its revenue streams and capitalize on opportunities beyond its core property ownership business.

Solid Balance Sheet and Liquidity Alpine Income Property Trust maintains a strong balance sheet and ample liquidity to support its growth initiatives. As of September 30, 2024, the company had $28.1 million in cash, including $25.5 million in restricted cash.

The company’s long-term debt position includes an outstanding balance of $79.5 million on its $250 million revolving credit facility and $200 million in term loans. This debt structure provides the company with significant financial flexibility and the capacity to fund future acquisitions and investments.

Additionally, Alpine has access to additional liquidity through its at-the-market (ATM) equity program, which has $98.3 million of availability remaining, and $53.5 million of unused capacity on its existing credit facility.

The company’s prudent financial management and access to capital resources position it well to continue executing its growth strategy and weathering any potential market volatility.

Outlook and Future Prospects Looking ahead, Alpine Income Property Trust remains optimistic about its future prospects. The company’s focus on acquiring high-quality, net-leased commercial properties in growing markets, coupled with its expanding commercial loans and investments portfolio, positions it for continued success.

The company’s management team is committed to maintaining a disciplined approach to capital allocation, evaluating opportunities that align with its long-term strategy and provide attractive risk-adjusted returns for shareholders.

Furthermore, Alpine’s external management structure, with CTO as its parent company, provides access to a deep pool of expertise and resources to support the company’s growth initiatives.

Overall, Alpine Income Property Trust’s strong third-quarter and year-to-date results demonstrate its ability to navigate the evolving real estate landscape and deliver value for its shareholders. The company’s diversified revenue streams, prudent financial management, and strategic focus position it well for continued success in the years ahead.