FrontView REIT, Inc.

Good morning, ladies and gentlemen, and welcome to the French View REIT Inc. Q4 2024 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, March 20th, 2025. I would now like to turn the conference over to Tim Dieffenbacher, CFO. Please go ahead.

Good morning, everyone, and welcome to our year-end earnings call. I'm joined today by Stephen Preston, Chairman, Co-CEO, and Co-President, and Randy Starr, Co-CEO and Co-President. Before I turn it over to Steve, please note that we will make certain statements that may be considered forward-looking statements under federal securities law. A couple of these actual results may differ significantly from the matters discussed in these forward-looking statements. We may not release revisions to these forward-looking statements in the future. 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 filings with the SEC and in yesterday's press release. With that, I'll turn it over to Steve.

Great. Thank you, Tim. Good morning, everyone. Welcome to Frontview's Q4 2024 earnings call. We are excited to review our first quarter as a public company after our IPO in October of 2024. As a reminder, Frontview is an internally managed net lease REIT that acquires, owns, and manages properties with frontage on high traffic roads that are highly visible to consumers. Over the last two quarters, we have demonstrated our ability to accretively grow the portfolio. During Q4 2024, we acquired 103.4 million of properties at an average cap rate of 7.93% and a weighted average lease term of 11 years. So far in Q1, 2025, we have closed on 37.9 million of property at an average cap rate of 7.8% and have an additional 18.2 million under contract and an average cap rate of 8.25%. As previously mentioned, we expect to close approximately $50 million of acquisitions during Q125. Although we previously guided to a Q125 cap rate of 7.5%, we expect to close these assets at an approximately 7.9 to 7.95% average cap rate, exceeding prior guidance by about 40 to 45 basis points, as we are sourcing more accretively than expected, as the marketplace continued to remain slightly imbalanced. As we look forward to the rest of 2025, we are still quite pleased with our ability to acquire at above market cap rates, a testament to our buyer approach and ability to demonstrate surety of close in a fragmented marketplace. Although we have seen a slight tightening in the marketplace, at this time, through the second quarter of 2025, we still believe we will acquire above the 7.5% cap rate mark, As we get into the second half of the year, there could be additional tightening if more capital opens up and debt financing for the buyers we typically compete against becomes more attractive. We will provide more direction on the back half of 2025 cap rates as we get a little deeper into the year. Our balance sheet is strong and we believe we have sufficient liquidity to fund our planned 2025 investment activity of approximately 175 to 200 million. Of course, We are monitoring our stock price and have the ability to make adjustments to our acquisition cadence very quickly should such actions become sensible. A few additional stats on the Q4 2024 acquisitions. Number of properties, 29. Average property price, 3.6 million. Number of new tenants, 12. Number of new states, 4. 95% corporate and only 5% franchisee. Investment grade percentage, approximately 27%. We purposefully did not acquire IG tenants in the pharmacy space or properties that could otherwise be IG, but did not meet our frontage requirements. At the end of 2024, we had $68.5 million drawn on our $250 million revolving line of credit. We anticipate having sufficient borrowing capacity under our facility to fund our investment activity for the year, coupled with our ability to reinvest surplus cash flow and generate accretive funds from the sale of properties. We sold a Freddy's during Q1, prompted by the closing of our only other Freddy's in Jacksonville, at a sales price of $2050, which was higher than our original purchase price and represented a cap rate of 6.9%. Moving now to portfolio highlights. Our portfolio continues to perform well. As of December 31st, our portfolio consists of 307 freestanding properties, with an average remaining lease term of over seven years. We are heavily diversified across 35 states and 109 metro areas. We are pleased to keep a very diversified portfolio with limited exposure to any one tenant. At quarter end, we decreased our largest tenant exposure by about 50 basis points from 3.4% of ABR to 2.9% of ABR. Occupancy was strong at approximately 98% with seven assets vacant, And rented collections on contractual rent were also strong at approximately 98% for the period, generally in line with our historical ranges. One of our differentiating qualities as a management team is our ability to successfully repurpose assets and bring them back online. Although anyone can sell off vacant assets quickly, we will also take the time to either sell, release, or re-tenant troubled assets to maximize economics, which we believe ultimately creates the best long-term value for our shareholders. In these situations, there is usually a little short-term ASFO pain for long-term gain as we incur tax and insurance costs to carry the assets through the process. As of today, on our previously noted watch list, we have already taken back or expect to take back one Freddy's, two TGI Fridays, one World Auto, four Hooters, three on the borders, and a Joann's Fabrics, representing about 4% of our ABR at the end of the year. We are very pleased with our progress to date to repurpose or sell off these assets, bringing income back online relatively quickly. We are already in negotiations to lease or sell half of these properties. In addition to these negotiations, we believe that two of our four Hooters could be candidates to remain leased post-Hooters bankruptcy, so we are already in discussions to sell both Hooters should they come back. Based upon current negotiations, we expect that a substantial majority of these properties should be back online in late 2025 at meaningful recovery rates. Most of these portfolio issues have stemmed from the sit-down fast casual space, which is clearly having performance issues in general. We've continued to reduce our exposure to this asset class over the years and believe that our portfolio should come out stronger as a result. Our exposure to the sit-down fast casual space at the end of Q3 2024 was 19.3% of ABR, and that figure has already declined to approximately 15% at the end of Q4 2024, with the expectation of further declines continuing into 2025. The pharmacy space has also been challenged for some time with significant store closings, and we have been reducing our exposure there as well. We currently only own three Walgreens properties and four CVS properties, representing just 3.3% of our combined ABR. We have one Walgreens expiring in 2025 that we expect will not renew, and we do not have any CVS properties expiring in 2025. These tenants hitting all at one time is a historical anomaly, and just because tenants are on a watch list, there is not necessarily an expectation that they would become or come offline from an income standpoint, especially all at one time. We fortunately own and operate properties with frontage, which are sought after by tenants and can generally be repurposed or recycled in relatively short order when the situations arise. We do not have any debt maturities in the near term, and we recently locked in our $200 million term loan for three years at a SOFR rate of 3.66%, representing an all-in borrowing rate of 4.96%. Lastly, Given the makeup of our capital structure, as the market knows, our earnings are a bit more sensitive to short-term SOFR swings until we achieve greater scale. Thank you, and let me turn it over to Tim for more detail on the quarterly numbers and guidance. Thanks, Steve.