Alpine Income Property Trust, Inc.

Good day, and thank you for standing by. Welcome to the Alpine Income Property Trust first quarter 2022 earnings call. At this time, all participant lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star, then 1 on your telephone keypad. Please be advised, today's conference may be recorded. If you require operator assistance during the call, please press star, then 0. I'd now like to hand the conference over to your host today, Matt Partridge, Senior Vice President, Chief Financial Officer, and Treasurer. Please go ahead.

Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust First Quarter 2022 Operating Results Conference Call. With me today is our CEO and President, John Albright. Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. 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 and our earnings release, which contain reconciliations of non-GAAP financial measures we use, on our website at alpinereit.com. With that, I'll now turn the call over to John.

Thanks, Matt, and good morning, everyone. We have had an eventful start to the year, acquiring 16 properties during the first quarter of 2022 for just over $65 million at an weighted average cap rate of 6.9%. and most recently selling our last remaining office property in Hillsboro, Oregon. The office sale completes our strategic shift to 100% retail portfolio and now positions Walgreens as our largest tenant. The bulk of our acquisition volume was concentrated in a nine-property Walgreens and CVS occupied pharmacy portfolio, which we purchased via a reverse 1031 exchange in anticipation of the office property sale. This portfolio allowed us to maintain the investment-grade credit exposure we were losing with the Wells Fargo sale while also improving the geographic diversity and more than doubling the remaining lease term of the sold property. In total, our 16 newly acquired properties are located in 12 states, have a weighted average lease term of nine years, and included seven different tenants operating in the pharmacy, grocery, auto parts, dollar stores, specialty retail, and convenience store sectors. With a 6.9% initial cap rate, the first quarter saw our acquisition yields return to a more normalized level, which is more consistent with where we expect to acquire throughout the year. Although with the year-to-date acceleration in interest rates, we're hopeful we'll start to see incremental cap rate expansion as we prudently look for opportunities to add to our pipelines. In terms of markets, we continue to favor infill locations that benefit from population density and higher barriers to entry, with more than two-thirds of our Q1 acquired rents coming from larger MSAs with more than 1 million people. Along these lines, we were able to add exposure to the New York, Philadelphia, Baltimore, Washington, D.C. markets at attractive per-square-foot valuations in assets that sit at the hard corner of well-trafficked intersections. As of the end of the quarter, our portfolio was once again 100% occupied and consisted of 129 properties totaling 3.5 million square feet with tenants operating in 26 sectors within 35 states. With the majority of our Q1 acquisition volume coming from the pharmacy and most specifically Walgreens, I'm pleased to say our investment grade credit exposure reached 50% at the end of the quarter. Walgreens is now our portfolio's largest tenant exposure and pharmacy is our largest sector. Following the sale of the office property earlier this month, today our top tenants include Walgreens, At Home, Hobby Lobby, Academy Sports, Dollar General, Walmart, and Lowe's. Obviously, the largest change to our top tenant list, the removal of Wells Fargo. When combined with our Hilton office property sales in the fourth quarter and our office dispositions generated more than $16 million of gains. which we reverse exchanged into our Houston Ground Lease portfolio and the first quarter Walgreens and CVS pharmacy portfolio. We're confident the recent changes to our portfolio improve our overall profile for investors, and given that we are trading at just over an implied 6.9% cash cap rate, we're hopeful they drive better valuation as the investment community can now more easily compare our portfolio to our largest net lease peers. Furthermore, we've increased our disposition guidance for 2022 as we look to sell properties where we can generate strong net investment spreads and book gains on our assets, which will highlight our portfolio's intrinsic value. By selling at low cap rates and buying at higher yields, we'll be able to incrementally de-lever our balance sheet, and because we anticipate being able to redeploy proceeds into comparable or stronger credits, we're optimistic our disposition program will further improve our overall performance portfolio metrics, and drive higher quality FFO per share. With that, I'll now turn the call over to Matt to talk about our first quarter performance, balance sheet, capital markets activities, and revised guidance.