Alpine Income Property Trust, Inc.

Good day and thank you for standing by. Welcome to the Alpine Q3 2023 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, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Partridge. Chief Financial Officer.

Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust Third Quarter 2023 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, earnings release, and most recent investor presentation, which contain reconciliations of non-GAAP financial measures we use, on our website at alpineread.com. I'll now hand the call over to John for his prepared remarks.

Thanks, Matt. And good morning, everyone. Jumping right in, investments during the quarter totaled $27.2 million, made up of $19.4 million of net lease acquisitions and a $7.8 million loan investment. Dispositions during the quarter totaled $20.6 million. During the quarter, the cash cap rate on our acquisitions was 9%, the initial yield on our loan investment was 8.5%, and the exit cap rate on our dispositions was 6.3%. Contributing to our outsized acquisition yield is the coals we purchased in Chandler, Arizona. This property is set to have its rent roll down 25% in the first quarter of 2024. The roll down was negotiated prior to our purchase in order to meaningfully extend the term of the property. The acquisition cap rate on our Q3 activity post-rent reset is 7.5%. which is the second highest cap rate for quarterly acquisition volume in our company's history, and more than 50 basis points above our historical average. The mortgage we originated during the quarter is our first loan investment at Pine. The project is a 33-acre development outside of Indianapolis that includes five net lease out parcels, including Wawa as the anchor tenant, and a multifamily development parcel. While our loan is secured by the entire land assemblage Proceeds from our loan are for the development of the single-tenant parcels. The loan has a term of two years, an initial yield of 8.5% in year one, an increase rate of 9.25% in year two, and we receive origination fees as part of the financing. The outstanding balance at the quarter end was $6.9 million. As we discussed on our last call, we view these first mortgage investments as an opportunity to invest in properties with high-quality tenants and strong sponsorship and outsized risk-adjusted return. These investments are going to be a minority component of our strategy, but they do provide attractive short-term yields while we seek longer-term core investment opportunities. In addition to our investment activity, we continued our strategic asset recycling program during the quarter, selling eight properties leased to non-investment-grade tenants, the majority of which were franchise restaurant operators. These asset sales generated total gains of 2.6 million. Our net investment spread during the quarter, which is the difference between the yield on our investments and less the yield on our properties sold with 266 basis points or 118 basis points when adjusted for the colds roll down. The 118 basis points is more than twice our long-term average and our highest quarterly spread since the third quarter of 2022. Overall, we're pleased with this quarter's transaction activity as we believe we have improved portfolio quality while generating attractive risk-adjusted returns. Year-to-date, we've invested $87 million at a 7.5% initial yield. 61% of acquired base rents come from tenants with investment-grade credit rating, and 87% of acquired base rents come from tenants that are publicly traded or whose debt is publicly traded. Additionally, during the first nine months of the year, we've sold 22 properties for $100 million, generating gains of sales of $7.8 million. Fourteen of the 22 properties sold were occupied by tenants who are not publicly traded or whose debt is not publicly rated. Today, 64% of our portfolio's base rent comes from investment-rated tenants, and 93% of our tenants are either publicly traded or have debt that is publicly traded. Our top tenants remain unchanged from the second quarter, which includes notable industry-leading operators such as Walgreens, Lowe's, Dick's Sporting Goods, Dollar General, Dollar Tree, Family Dollar, Walmart, Best Buy, Hobby Lobby, and Home Depot. From a portfolio management perspective, we did have seven Valero branded convenience store properties become vacant during the quarter as a result of bankruptcy and a subsequent liquidation of the operator, Mountain Express. These properties are relatively small in size and the rents are modest in the context of our entire portfolio, but nevertheless, the lost rent and resulting marginal increase in our borrowing costs due to this bankruptcy, as well as projected timing of the transaction activity, are all contributing factors to our revised guidance. The impact of the bankruptcy should largely be contained to our third quarter and fourth quarter operating results as we anticipate putting this issue behind us by selling the properties in the coming months and reinvesting the proceeds. And finally, we did buy back nearly $5 million per common stock during the third quarter at what we believe to be accretive pricing as our stock is trading near an implied 8% cap rate and well below our book value. We'll continue to be active on our $15 million buyback program as long as our stock trades at what we believe is a meaningful discount to the underlying value of our portfolio and operating platform. Now I'll turn the call over to Matt to discuss our quarterly results, balance sheet, and revised guidance.