Alpine Income Property Trust, Inc.

Good day and thank you for standing by. Welcome to the Alpine Income Property Trust Q2 2026 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, Jenna McKinney, Director of Finance. Ma'am, please go ahead.

Thank you. Joining me and participating on the call this morning are John Albright, President and Chief Executive Officer, Philip Mays, Chief Financial Officer, and other members of the executive team who will be available to answer questions during the call. As a reminder, many of our comments today are considered forward-looking statements under federal securities laws. 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 the Non-Gap Financial Measures we use on our website at www.alpinereit.com. With that, I'll turn the call over to John.

Thank you, Jenna, and good morning, everyone. We are pleased to report another strong quarter, highlighted by 32% growth in AFFO per diluted share compared to the same quarter last year, and approximately $77 million of total investment activity at a blended initial yield of 8.7%. With this activity, our property portfolio's annualized base rent grew to $50 million at quarter end, with 55% attributable to investment grade rated tenants, and our commercial loan portfolio remained at our targeted level of 20% of total undepreciated asset value. Starting with property acquisitions, during the quarter, we acquired three properties for $36.6 million at a weighted average initial cap rate of 7.4% and a weighted average remaining lease term of 9.2 years. These acquisitions included a three-property portfolio leased to Aldi, HomeGoods, and Petco, and two properties ground leased to Lowe's and Alamo Drafthouse, which is a subsidiary of an A-plus rated Sony Group Corporation. These acquisitions meaningfully strengthened our portfolio's credit profile. The percentage of ABR derived from investment grade rated tenants increased from 50% to 55% driven by acquisition activity that was 84% investment grade. At quarter end, four of our top five tenants, Lowe's, Dick's Sporting Goods, Walmart, and Alamo Drafthouse are now investment grade rated. More broadly, as a quarter end, our property portfolio consisted of 128 properties totaling 4.5 million square feet across 31 states with 99.5% occupancy in a waltz of 9.2 years. Moving to our commercial loan investments, during the quarter we originated a new $40 million first mortgage loan with $6.2 million funded during the quarter at an initial yield of 10%. The loan is secured by a 24-acre, 55,000-square-foot Publix-anchored retail development and follow the grocery shadow anchored development loan we originated in the first quarter. Also, during the quarter, we received full repayment of $8 million of commercial loans that carried weighted average yield of 8%, allowing us to recycle that capital into higher yielding investments. Reflecting this activity, at quarter end, our commercial loan portfolio consisted of 13 loans with an outstanding face amount of $167 million at a weighted average coupon rate, including PIC interest of 13.2%. Our loan portfolio remains at our targeted level of approximately 20% of the company's total undepreciated asset value, complementing our property portfolio and increasing the overall yield earned on our total assets. However, as noted previously, the timing of fundings and repayments may cause the relative size of loan portfolio to vary quarter by quarter. With our completed investment activity this quarter and robust investment pipeline, we opportunistically utilized our ATM programs to raise capital. Our investment pipeline continues to have attractive opportunities, including high-quality properties, net lease to investment-rated tenants to enhance the credit metrics of our portfolio, and attractive loans to replace maturities. Lastly, reflecting are earnings growth and taxable income outlook for the company. Our board has authorized a 6.7% increase in our quarterly common dividend to $0.32 per share beginning in the third quarter of 2026. This new quarterly common dividend rate represents a relatively low 55% AFFO payout ratio on second quarter 2026 AFFO. Further, we're raising the low end of our full year FFO and AFFO guidance which Phil will detail later.