Alpine Income Property Trust, Inc.

Good day and thank you for standing by. Welcome to the Alpine Income Property Trust Fourth Quarter 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 this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. 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. Please go ahead.

Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust's fourth quarter and full year 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 our non-GAAP financial measures we use, on our website at alpineread.com. I'll now turn the call over to John for his prepared remarks.

Thanks, Matt, and good morning, everyone. As we look back at our execution in 2023, we continue to emphasize the value-focused asset recycling program we implemented nearly two years ago. This program has allowed us to reposition our portfolio into higher quality credits that de-risk our cash flows and provided the liquidity needed for our opportunistic share repurchases and strong yielding first mortgage investments. Within the fourth quarter, the majority of our investment activity was concentrated in these first mortgage investments and share repurchases. And we believe these investment opportunities provide attractive risk adjusted returns compared to other opportunities available in the market. During the quarter, we originated nearly $31 million of first mortgage loan investments and acquired two single tenant net lease properties for $3 million. The initial yield on our loan investments was 9.2% and the cash cap rate of our property acquisitions was 7.3%. Our largest investment was a low leverage $24 million first mortgage secured by 41 retail properties. In conjunction with the loan, we entered into a fee sharing agreement with CTO Realty Growth, our external manager. This fee-sharing agreement allows us to receive a share of the asset management disposition and leasing fees related to CTO's management. The other loan investment we made during the quarter was a first mortgage to provide $6.8 million of funding towards the purchase and development of a five-acre project anchored by Wawa and McDonald's in a growing sub-market of Nashville, Tennessee. While we intend for our loan investments to remain a relatively small component of our overall asset base and strategy, they do provide future purchase options for our acquisition pipeline and serve as catalysts for our future partnership opportunities with sponsors, and we believe they offer compelling risk-adjusted yields supported by strong tenant credits and well-capitalized sponsors. On the acquisition front, we've acquired two newly built properties leased to Dollar Tree Family Dollar as we saw fewer attractive core investment opportunities due to reluctant sellers. And finally, as it relates to our common stock buybacks, we repurchased $9.5 million of our common stock at an average price of just over $16 per share during the fourth quarter. The implied cap rate of these repurchases was above 8%, which is significantly above the cap rates for comparable fee simple property investments available in the market, especially considering 65% of our annualized base rent comes from tenants with an investment grade credit rating and our stock pays nearly a 6.9% dividend yield at $16 per share. For the full year of 2023, we acquired 14 net lease properties for $83 million at a 7.4% cash cap rate and originated three first mortgage investments totaling just under $39 million of funding commitments at the initial yield of 9.1%. Over 66% of the acquired base rents from the property acquisitions in 2023 come from tenants with investment grade credit rating. On the disposition side of things, during the full year 2023, we sold 24 properties for $108 million that awaited the average exit cap rate of 6.3%, generating gains of 9.3 million. Overall for the year, our net investment spread, which is the difference between our investment yields and disposition yields, averaged 159 basis points. So even with limited access to the capital markets and the increase in interest rates over the past 18 months, we're still driving positive increases in cash flow through our asset recycling strategy. From our portfolio makeup perspective, Matt will outline more of the specifics with his prepared remarks, but given we are coming up on our five-year anniversary later this year, I wanted to take a moment to highlight the progress we've made in transitioning our portfolio through our asset recycling strategy. Since inception of the company, we've recycled nearly $600 million of capital as we've accretively sold off primarily office assets and properties occupied by non-credit tenants and reinvested the proceeds at positive net investment spreads. As a result, we've taken our office exposure from 43% to 0%, increased our exposure to investment grade rated tenants from 36% to 65%, increased per share quarterly dividend by more than 37%, and our top tenant list, which includes the likes of industry leaders such as Walgreens, Lowe's, Dick's Sporting Goods, Dollar Tree, Family Dollar, Dollar General, Walmart, Best Buy, Hobby Lobby, and Home Depot now compares favorably to many of our peers that trade at significantly better valuations. From a valuation perspective, we're currently trading well above an implied 8% cap rate on our real estate portfolio and at a significant discount to our book value of $18.36 per share. Additionally, we have strong AFFO per share growth projected for 2024, and our loan investments provide a natural deleveraging opportunity over the next 24 months. To put it bluntly, we're a great value today, and we look forward to maximizing that value for our shareholders. Now I'll turn the call over to Matt to discuss our portfolio makeup, quarterly results, balance sheet, and 2024 guidance.