Q1 2022 Alpine Income Property Trust Inc Earnings Call

April 22, 2022

Operator 3: Good day, and thank you for standing by. Welcome to the Alpine Income Property Trust Q1 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 one 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 zero. 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.

Operator: Good day, and thank you for standing by. Welcome to the Alpine Income Property Trust Q1 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 one 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 zero. 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 day, and thank you for standing by and welcome to the Alpine income property Trust first quarter 2022 earnings call.

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. What is your question after the speech?

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 to...

To ask a question during this session you'll need to press Star then one on your telephone keypad.

Please be advised today's conference maybe recorded.

If you require operator assistance during the call. Please press Star then zero.

If you require operator assistance during the call, please press star then zero.

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.

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.

Matt Partridge: Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust Q1 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.

Good morning, everyone and thank you for joining us today for the Alpine income property Trust first quarter 2022 operating results conference call.

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.

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.

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 alpinereet.com. With that, I'll now turn the call over to John . Thanks, Matt.

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 to non-GAAP financial measures. We use on our website at alpine <unk> dot com with that I'll now turn the call over to John .

John Albright: Thanks, Matt, and good morning, everyone. We have had an eventful start to the year, acquiring 16 properties during Q1 2022 for just over $65 million at a weighted average cap rate of 6.9%. Most recently, selling our last remaining office property in Hillsboro, Oregon. The office sale completes our strategic shift to a 100% retail portfolio and now positions Walgreens as our largest tenant. The bulk of our acquisition volume was concentrated in a 9-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.

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 a weighted average cap rate of six 9% and most recently selling our last remaining office property in Hillsboro, Oregon the.

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 filling our last remaining office property in Hillsboro, Oregon.

The office sale completes our strategic shift to 100% retail portfolio.

The office sale completes our strategic shift to 100% retail portfolio and now positions Walgreens as our largest tenant.

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.

The bulk of our acquisition volume was concentrated in a nine property Walgreens and Cvs occupied pharmacy portfolio, which we purchased via a reverse 10 31 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 properties.

This portfolio allowed us to maintain the investment grade credit exposure we were losing with the Wells Fargo sell while also improving the geographic diversity in more than doubling the remaining lease term of the sold property.

John Albright: In total, our 16 newly acquired properties are located in 12 states, have a weighted average lease term of 9 years, and included 7 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 Q1 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 pipeline. 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.

John Albright: 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 Q1 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 pipeline. 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.

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.

In total our 16 newly acquired properties are located in 12 states have a weighted average lease term of nine years.

Included seven different tenants operating in the pharmacy grocery auto parts dollar stores, especially 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.

With a 6.9% initial cap rate the first quarter saw our acquisition yields returned 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 interest rates, we're hopeful we'll start to see incremental cap rate expansion as we prudently look for opportunities to add to our pipeline.

Although with the year-to-date acceleration interest rates, we're hopeful we'll start to see incremental cap rate expansion as we prudently look for opportunities to add to our pipeline.

In terms of markets, we continue to favor infill locations that benefit from population density and higher barriers to entry.

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 one 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 and assets that sit at the hard corner of well traffic intersections.

With more than two thirds of our Q1 acquired rents coming from larger msas with more than 1 million people.

John Albright: Along these lines, we were able to add exposure to the New York, Philadelphia, Baltimore, Washington DC 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 sq ft, 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.

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 and assets that sit at the heart corner of well traffic 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 see.

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.

Our investment grade credit exposure reached 50% at the end of the quarter Walgreens is now our portfolio's largest tenant exposure in 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.

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.

John Albright: Obviously, the largest change to our top tenant list, the removal of Wells Fargo, when combined with our Hilton office property sales in Q4 and our office dispositions, generated more than $16 million of gains, which we reverse exchanged into our Houston ground lease portfolio in Q1, Walgreens and CVS Pharmacy portfolio. We're confident the recent changes to our portfolio improve our overall profile for investors. 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.

Obviously, the largest change to our top tenant list is 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 were reverse exchanged into our Houston ground lease portfolio and the first quarter Walgreens and CVS pharmacy portfolio.

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 were you're averse exchanged into our Houston ground lease portfolio in 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.

We're confident that our recent changes to our portfolio improve our overall profile for investors and given that we are trading at just over an implied six 9% cash cap rate, we're hopeful they drive better valuation as the investment community and 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.

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.

Spreads and book gains on our assets, which will highlight our portfolio's intrinsic value.

John Albright: By selling at low cap rates and buying at higher yields, we'll be able to incrementally de-lever our balance sheet. Because we anticipate being able to redeploy proceeds into comparable or stronger credits, we're optimistic our disposition program will further improve our overall portfolio metrics and drive higher quality FFO per share. With that, I'll now turn the call over to Matt to talk about our Q1 performance, balance sheet, capital markets activities, and revised guidance.

By selling at low cap rates and buying and higher yields will be able to incrementally delever, our balance sheet and because we anticipate being able to redeploy proceeds into comparable are stronger credits. We're optimistic our disposition program will further improve our overall portfolio metrics and drive higher quality <unk> per share with.

By selling at low cap rates and buying at higher yields, we'll be able to incrementally delever 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 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.

I'll now turn the call over to Matt to talk about our first quarter performance balance sheet capital markets activities and revised guidance.

Matt Partridge: Thanks, John. Jumping right into Q1 results. Q1 2022 FFO was $0.49 per share, a $0.07 per share or 16.7% increase compared to Q1 2021. Q1 2022 AFFO was $0.48 per share, a $0.04 per share or 9.1% increase over Q1 2021. The most notable variance between our FFO and AFFO year-over-year performance is the $248,000 of net non-recurring COVID rent deferral repayments that totaled $271,000 in Q1 2021 and just $23,000 in Q1 2022. I'm very pleased to say next quarter will be the last quarter of scheduled COVID rent deferral repayments, marking the completion and full recovery of all of our previously deferred rents.

Thanks, John jumping right into Q1 results first quarter 2022, <unk> was 49 cents per share or seven cents per share or 16, 7% increase compared to the first quarter of 2021.

Thanks, John . Jumping right into Q1 results, first quarter 2022 FFO was 49 cents per share, a 7 cent per share or 16.7% increase compared to the first quarter of 2021. First quarter 2022 AFFO was 48 cents per share, a 4 cent per share or 9.1% increase over the first quarter of 2021.

First quarter 2022, <unk> was 48 cents per share a four cent per share or nine 1% increase over the first quarter of 2021.

The most notable variance between our FFO and AFFO year-over-year performance is the $248,000 of net non-recurring COVID rent deferral repayments that totaled $271,000 in the first quarter of 2021 and just $23,000 in the first quarter of 2022. I'm very pleased to say next quarter will be the last quarter of scheduled COVID rent deferral repayments, marking the completion and full recovery of all of our previously deferred rents.

Notable variance between our <unk> and <unk> year over year performance is the 248000 of net nonrecurring COVID-19 rent deferral repayments totaled 271000 in the first quarter of 2021, and just 23000 in the first quarter of 2022.

I'm very pleased to say.

Next quarter will be the last quarter of scheduled COVID-19 rent deferral repayments, marking the completion and full recovery of all of our previously deferred rent.

Matt Partridge: On the operating side of things, our portfolio remains 100% occupied, and as we have monitored the corporate performance of our tenants through Q1 of the year, we've largely seen continued improvement in corporate level operating trends or a demonstrated ability to maintain strong, consistent performance across nearly all of our tenant sectors. Our general and administrative expenses for the quarter, which includes $936,000 in management fees to our external manager, totaled $1.4 million. This was a year-over-year increase of 39%, largely driven by increases to our management fee from our 2021 equity capital markets activities and was positively offset by a revenue growth of more than 83%.

On the operating side of things our portfolio remains 100% occupied and as we've monitored the corporate performance of our tenants through the first quarter of the year. We've largely seen continued improvement in corporate level operating trends or a demonstrated ability to maintain strong consistent performance across nearly all of our tenant sectors.

On the operating side of things, our portfolio remains 100% occupied. And as we have monitored the corporate performance of our tenants through the first quarter of the year, we've largely seen continued improvement in corporate level operating trends or demonstrated ability to maintain strong, consistent performance across nearly all of our tenants sectors.

Our general and administrative expenses for the quarter, which includes $936,000 in management fees to our external manager, totaled $1.4 million.

Our general and administrative expenses for the quarter, which includes $936000 of management fees to our external manager totaled $1.4 million.

This was a year-over-year increase of 39%, largely driven by increases to our management fee from our 2021 equity capital markets activities, and was positively offset by a revenue growth of more than 83%.

This was a year over year increase of 39% largely driven by increases to our management fee from our 2021 equity capital markets activities and was positively offset by a revenue growth of more than 83%.

Matt Partridge: G&A, as a percentage of revenues in Q1, was 13.3%, a year-over-year decrease of nearly 425 basis points, which, as I've highlighted in the past quarters, continues to reflect our improving organizational scale and efficiency. For Q1 2022, the company paid a cash dividend of $0.27 per share, representing a 12.5% year-over-year increase over the company's Q1 2021 cash dividend and a current annualized yield of approximately 5.7%. FFO and AFFO Q1 payout ratios were very healthy at 55% and 56% respectively, and we anticipate announcing our regular quarterly cash dividend for Q2 towards the end of May.

G&A as a percentage of revenues in the first quarter was 13, 3% a year over decrease of nearly 425 basis points, which as I've highlighted in the past quarters continues to reflect our improving organizational scale and efficiency.

G&A as a percentage of revenues in the first quarter was 13.3%, a year over decrease of nearly 425 basis points, which as I've highlighted in the past quarters, continues to reflect our improving organizational scale and efficiency.

For the first quarter of 2022, the company paid a cash dividend of $0.27 per share, representing a 12.5% year-over-year increase over the company's Q1 2021 cash dividend and a current annualized yield of approximately 5.7%.

For the first quarter of 2022, the company paid a cash dividend of <unk> 27 per share representing a 12, 5% year over year increase over the company's Q1, 2021 cash dividend and a current annualized yield of approximately five 7%.

FFO and AFFO first-quarter payout ratios were very healthy at 55% and 56% respectively, and we anticipate announcing our regular quarterly cash dividend for the second quarter towards the end of May.

<unk> first quarter payout ratios were very healthy at 55%, 56%, respectively, and we anticipate announcing a regular quarterly cash dividend for the second quarter towards the end of Mac.

Matt Partridge: On the capital markets front, we issued 315,000 shares of common stock through our ATM program during Q1 for total net proceeds of $6.1 million at an average issuance price of $19.65 per share. We ended the quarter with net debt to total enterprise value of 56%, net debt to pro forma EBITDA of 8.8x, and a very healthy fixed charge coverage ratio of 5.6x. Subsequent to quarter end, we exercised the accordion options on our 2026 and 2027 term loans, closing on an additional $60 million of proceeds. These proceeds were used to pay down our unsecured revolving credit facility.

On the capital markets front, we issued 315000 shares of common stock through our ATM program. During the first quarter for total net proceeds of $6 $1 million at an average issuance price of $19 65 per share.

On the capital markets front, we issued 315,000 shares of common stock through our ATM program during the first quarter for total net proceeds of $6.1 million at an average issuance price of $19.65 per share.

We ended the quarter with net debt to total enterprise value of 56%, net debt to pro forma EBITDA of 8.8 times, and a very healthy fixed charge coverage ratio of 5.6 times.

We ended the quarter with net debt to total enterprise value of 56% net debt to pro forma EBITDA at 8.8 times and a very healthy fixed charge coverage ratio of five six times.

Subsequent to quarter end, we exercise the accordion options on our 2026 and 2027 term loans, closing on an additional $60 million of proceeds. These proceeds were used to pay down our unsecured revolving credit facility. When combined with the proceeds from the wealth

Sequent to quarter end, we exercised the accordion option on our 2026 and 2027 term loans closing on an additional $60 million of the proceeds. These proceeds were used to pay down our unsecured revolving credit facility when.

Matt Partridge: When combined with the proceeds from the Wells Fargo asset sales, which were also used to pay down our unsecured revolving credit facility, we increased our potential liquidity to approximately $100 million through available cash and overall borrowing capacity on our revolver. In consideration of our Q1 performance and the current capital markets backdrop, we did increase full year guidance to account for a lower weighted average share count for the year, increased acquisition and disposition guidance, expectations for increasing near term and long-term interest rates, as well as revisions to a number of other influential assumptions. We begin Q2 2022 with portfolio-wide in-place annualized straight-line base rent of $41.6 million or $40.5 million of in-place annualized cash base rent, and this number is before the sale of the Wells Fargo that occurred during the second quarter.

When combined with the proceeds from the Wells Fargo asset sales.

Which were also used to pay down our unsecured revolving credit facility, we increased our potential liquidity to approximately $100 million through available cash and overall borrowing capacity on our revolver and consideration of our Q1 performance and the current capital markets backdrop, we did increased full year guidance to account for a lower weighted average share count for the year increased acquisition and <unk>.

which were also used to pay down our unsecured revolving credit facility, we increased our potential liquidity to approximately $100 million through available cash and overall borrowing capacity on our revolver.

In consideration of our Q1 performance in the current capital markets backdrop, we did increase full year guidance to account for a lower weighted average share count for the year, increased acquisition and disposition guidance, expectations for increasing near-term and long-term interest rates, as well as revisions to a number of other influential assumptions.

Physician guidance expectations for increasing near term and long term interest rates as well as revisions to a number of other influential assumptions. We began the second quarter of 2022 with portfolio wide in place annualized straight line base rent of $41.6 million or $40 $5 million of in place annual.

We begin the second quarter of 2022 with portfolio-wide in-place annualized straight-line-based rent of $41.6 million, or $40.5 million in-place annualized cash-based rent, and this number is before the sale of the Wells Fargo that occurred during the second quarter.

<unk> cash base rent and this number is before the sale of the wells Fargo that occurred during the second quarter.

Matt Partridge: Our increased full year 2022 FFO guidance range is $1.55 to $1.60 per share, and our full year 2022 AFFO guidance range was increased to $1.53 to $1.58 per share. Consistent with our comments last quarter to our 2022 per share guidance, we are forecasting a de-levering of the balance sheet when compared to our current Q1 2022 credit metrics, which is accomplished through our increased disposition guidance and from our revised projections for capital markets activities throughout the balance of the year.

Our increased full year 2022 FFO guidance range is $1.55 to $1.60 per share, and our full year 2022 AFFO guidance range was increased to $1.53 to $1.58 per share.

Our increased full year 2022 episodes guidance range is $1.55 to $1 60 per share and our full year 2022, <unk> guidance range was increased to $1 53.

It's $1 58 per share.

Consistent with our comments last quarter to our 2022 per share guidance, we are forecasting a delevering of the balance sheet when compared to our current Q1, 2022 credit metrics, which is accomplished through our increased disposition guidance and from our revised projections for capital markets activities throughout the balance of the year.

Consistent with our comments last quarter to our 2022 per share guidance, we are forecasting a delevering of the balance sheet when compared to our current Q1 2022 credit metrics, which is accomplished through our increased disposition guidance and from our revised projections for capital markets activities throughout the balance of the year.

Matt Partridge: On the transaction front, we now expect to acquire between $215 million and $250 million of retail net lease properties during 2022, which is a 7.5% increase to the bottom end of our range and subject to other market conditions, which we believe these acquisitions will occur at similar or better blended yields to our current 2021 full year acquisition cap rate. Finally, as John noted earlier, we increased our disposition guidance in order to provide real-time valuations of some of our larger tenant exposures, generate accretive net investment spreads, and incrementally de-lever our balance sheet, all of which we expect will improve our overall portfolio metrics and drive higher quality FFO per share.

On the transaction front, we now expect to acquire between $215 million and $250 million of retail net lease properties during 2022, which is a 7.5% increase to the bottom end of our range and subject to other market conditions, which we believe these acquisitions will occur at similar or better blended yields to our current 2021 full-year acquisition cap rates.

On the transaction front, we now expect to acquire between $215 million and $250 million of retail net lease properties. During 2022, which is a seven 5% increase to the bottom end of our range and subject to other market conditions, which we believe these acquisitions will occur at similar better blended yields to our current 2021 full year acquisition.

Cap rates.

And finally.

As John noted earlier, we increased our disposition guidance in order to provide real-time valuations of some of our larger tenant exposures, generate accretive net investment spreads, and incrementally delever our balance sheet, all of which we expect will improve our overall portfolio metrics and drive higher-quality FFO per share. A revised disposition guidance forecast

As John noted earlier, we increased our disposition guidance in order to provide real time valuations of some of our larger tenant exposures generated accretive net investment spreads and incrementally delever, our balance sheet all of which we expect will improve our overall portfolio metrics and drive higher quality F O per share our revised disposition guidance forecast.

Matt Partridge: Our revised disposition guidance forecast between $75 and 100 million of asset sales throughout the year, up by $35 million at the low end and $50 million at the high end. Our guidance includes the already completed sale of the office building in Hillsboro, Oregon. With that, I'll now turn the call back over to John for his closing remarks.

between $75 and $100 million of asset sales throughout the year, up by $35 million at the low end and $50 million at the high end, and our guidance includes the already completed sale of the office building in Hillsborough, Oregon. With that, I'll now turn the call back over to John for his closing remarks.

Between 75, and $100 million of asset sales throughout the year up by $35 million at the low end and $50 million at the high end and our guidance includes the already completed sale of the office building in Hillsboro, Oregon with that I'll now turn the call back over to John for his closing remarks.

John Albright: Thanks, Matt. We're pleased with our solid start to the year, driven by our strong investment activity and the completion of our portfolio strategic shift to becoming 100% retail. While there has been a lot of volatility in the market this year, we intend to keep selectively pruning our portfolio to demonstrate the attractive and resilient value of our investments while driving towards a higher quality earnings. We have a strong operational roadmap in place to help us outperform over the long run, and we appreciate the continued support of our shareholders as we execute on our plan. I want to thank our team for all of their accomplishments. At this time, we'll open it up for questions. Operator.

Thanks, Matt we're pleased with our solid start to the year driven by our strong investment activity and the completion of our portfolio of strategic shift to becoming a 100% retail while there has been a lot of volatility in the market. This year, we intend to keep selectively pruning our portfolio to demonstrate the attractive and resilient value of our investments.

Thanks, Matt. We're pleased with our solid start to the year, driven by our strong investment activity and the completion of our portfolio strategic shift to becoming 100% retail. While there has been a lot of volatility in the market this year, we intend to keep selectively pruning our portfolio to demonstrate the attractive and resilient value of our investments, while driving towards a high-quality return on investment.

While driving towards a higher quality earnings.

We have a strong operational roadmap in place to help us outperform over the long run and we appreciate the continued support of our shareholders as we execute on our plan.

I want to thank our team for all of their accomplishments at this time, we'll open it up for questions operator.

I want to thank our team for all of their accomplishments. At this time, we'll open it up for questions. Operator?

Operator 3: If you'd like to ask a question at this time, please press the star, then the number one key on your touch tone telephone. To withdraw your question, press the pound key. Our first question comes from Rob Stevenson with Janney.

Operator: If you'd like to ask a question at this time, please press the star, then the number one key on your touch tone telephone. To withdraw your question, press the pound key. Our first question comes from Rob Stevenson with Janney.

If you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.

If you'd like to ask a question at this time, please press the star, then the number one key on your touch-tone telephone. To withdraw your question, press the pound key.

To withdraw your question press the pound key.

Our first question comes from Rob Stevenson with Janney.

Our first question comes from Rob Stephenson with Janie.

Yes.

Rob Stevenson: Good morning. John, the Walgreens leases, are those the standard flat, no bumps, leases? If so, what does that do to your bumps for the portfolio as a whole now that that's your largest tenant? What also made that, you know, portfolio attractive to you guys at this point in time, given the sort of hyper-growth phase that PINE is still in at this point?

Good morning.

Good morning. John , the Walgreens leases, are those the standard flat, no bumps leases? And if so, what does that do to your bumps for the portfolio as a whole now that that's your largest tenant? And then what also made that portfolio attractive to you guys at this point in time, given the sort of hyper growth phase that Pine is still in at this point?

John .

Walgreens leases are those the standard.

Flat no bumps.

Leases and if so.

What does that do to your <unk>.

Your bumps for the portfolio as a whole now that that's your largest tenant and then what also made that you know portfolio attractive to you guys. At this point in time, given the sort of hyper growth phase that pine is still in at this point.

John Albright: Yeah. Thanks, Rob. Kind of on your latter question on the attractiveness, it was a portfolio deal. It was the sellers were motivated, not tax driven or what have you, and, you know, just wanted to kind of get it done. It was kind of a smaller portfolio. They weren't, you know, too price sensitive, so we feel like we got a really good price for the quality portfolio. But to answer your question on the Walgreens lease, yes, it's a standard lease situation that Walgreens has across the board. With regards to rent bumps on what that does to the portfolio, I'll let Matt kind of opine on that.

Yeah, Thanks, Rob so kind of on your on the.

Yeah, thanks, Rob. So kind of on your on the ladder question on the attractiveness, it was a portfolio deal. It was the sellers were motivated, not not tax driven or what have you. And we just wanted to kind of get it done. It was kind of a smaller portfolio. And so

Latter question on the attractive knows there was a portfolio deal. It was a the sellers are motivated I'm not.

Not not tax driven or what have you and just wanted to kind of get a Don it was kind of a smaller portfolio and so.

They weren't, you know, too price sensitive, so we feel like we got a really

They werent.

Too price sensitive so we feel like we've got a really.

a good price for the quality portfolio, but to answer your question on the Walgreens lease, yes, it's a standard lease situation that Walgreens has across the board, and with regards to rent bumps on what that does to the portfolio, I'll let Matt kind of pine on that.

Good price for the quality portfolio, but to answer your question on the Walgreen's lease, yes, as a standard lease.

Lee situation that Walgreens has across the board and with regards to our rent bumps on what that does the portfolio all that math kind of opine on that yeah, Hey, Rob.

Matt Partridge: Yeah. Hey, Rob. Post-acquisition of the Walgreens and post-sale of the Wells Fargo, about half the portfolio has either annual or periodic rent bumps in the existing terms.

Post acquisition of the Walgreens and post sale of the Wells Fargo about half the portfolio has has either annual or periodic rent bumps in the base and the existing terms and what is that average now.

Post-acquisition of the Walgreens and post-sale of the Wells Fargo, about half the portfolio has either annual or periodic rent bumps in the existing terms.

Rob Stevenson: What is that average now?

Matt Partridge: In terms of annual growth?

In terms of.

In terms of annual growth? Yeah. It depends on the year, but it's somewhere between 75 and 125 basis points per year on average.

Annual growth yeah.

Rob Stevenson: Yeah.

Matt Partridge: It depends on the year, but it's somewhere between 75 and 125 basis points per year on average.

It depends on the year, but it's somewhere between 75 and 125 basis points per year on average okay perfect.

Rob Stevenson: Okay. Perfect. Matt, while I've got you here, you know, you guys expanded your debt capacity here, but in talking with your bank group, if you had to go out there and access new debt today or replace parts of your stack, where would that price versus the beginning of the year? It seems like, you know, over the last 5, 7 years, every time rates have gone up, the spread has gone down in the REIT space. I assume that some of that's happened, but some of that big jump in rates over the last 3, 4 months would be transmitted into your cost of borrowing. How significant is that for you guys these days if you had to access new debt rather than expanding existing?

uh... and then matt while i've got you here it you know it you got expanded your your debt capacity here but it talking with your bank group if you had to go out there and access new debt today or replace parts of your where would that price versus

And then Matt while I've got you here.

You guys expanded your your debt capacity here, but in talking with your Bank group. If you had to go out there and access new debt today or replace parts of your stack where would that price versus the.

uh... the beginning of the year it seems like you know the last five seven years every time rates have gone up the spread has gone down in the reed space i assume that some of that happened but some of that big jump in rates over the last three four months uh... would be transmitted into your cost of borrowing how significant is that for you guys this these days if you had to access new that rather than expanding existing

At the beginning of the year. It seems like you know over the last five seven years every time rates have gone up the spread has gone down in the REIT space I assume that some of that has happened, but some of that big jump in rates over the last three four months would be transmitted into your cost of borrowing how significant is that for you.

Is this these days if you had to access new debt rather than expanding existing.

Matt Partridge: Yeah. I would say spreads have largely hung in there on the unsecured side, and I think they've moved out a little bit on the secured front, which we don't do a lot of. Really where it's widened out is on the forward swaps. The five-year forward swaps, last we checked about a couple weeks ago, they had moved out to over 2.5%. You know, so from a spreads perspective, we're all in between 135 and 195, which has been attractive for us. Obviously with where new swaps are, you're in the 4%+ range to do new fixed rate five-year debt.

Yeah, I would say spreads have largely hung in there on the unsecured side. And I think they've moved out a little bit on the secured front, which we don't do a lot of. Really where it's widened out is on the forward swaps. The five-year forward swaps, last we checked about a couple weeks ago, they had moved out to over 2 and 1 1?2.

Yeah, I would say spreads have largely hung in there on the unsecured side and I think they've moved out a little bit on the secured front, which which we don't do a lot of.

Really where it's widened out as on the forward swaps the five year forward swaps lots.

Last we checked about a couple of weeks ago.

It had moved out to over two 5%.

Uh, you know, so from a spreads perspective, we're all in between 135 and 195.

So from our spreads perspective, we're all in between $1 35 and 195.

Which has been attractive for us, but obviously with where new swaps or you are in the 4% plus range to do new fixed rate five year debt. Okay. And then last one for me John any sense, you know in and looking out there at your own pipeline or in the conversations that youre, having in the early stages on deals.

It's been attractive for us, but obviously with where new swaps are, you're in the 4% plus range to do that.

Rob Stevenson: Okay. Last one for me, John. Any sense, you know, in looking out there at your own pipeline or in the conversations that you're having in the early stages on deals that, you know, anything is happening yet in terms of either pricing for assets or the size of the amount of properties being brought to market these days? Any, you know, changes of note that you would say between now and, you know, three or six months ago?

OK, and then last one for me, John , any sense.

you know in in looking out there at your own pipeline or the conversation that you're having in the early stages on on deals that you know anything is happening yet in terms of either pricing for assets or uh... the size of the amount of properties being brought to market these days any you know changes of note that you would say between now and you know three or six months ago

That you know anything is happening yet in terms of either pricing for assets or the size of the amount of properties being brought to market. These days any changes of note that you would say between now and you know three or six months ago.

John Albright: Yeah. As I mentioned on our last earnings call, we're certainly have expanded out our acquisition interest as far as cap rates and have bid wider than the market. I can give you some, you know, obviously real data point color that, you know, as you've seen, we have expanded our disposition guidance because we're still seeing very strong low cap rates on smaller type assets. We're, you know, feeding more of our properties into the sell market because we can reinvest those at higher spreads, higher yields. We're gonna do that. Right now, we're seeing the pricing very strong for smaller assets, and I think that's really because what you're seeing is people wanna get out of the way of the bond market.

Yeah, So as I mentioned on our last earnings call. We're certainly have expanded out our acquisition interest as far as cap rates and have been wider than the market.

Yes, so as I mentioned on our last earnings call, we certainly have expanded out our acquisition interest as far as cap rates and have bid wider than

So I can give you some, you know, obviously real data point color that, you know, as you've seen, we have expanded our disposition guidance because

So I can give you. Some you know obviously real data point color is that as you as you've seen we have expanded our disposition guidance because we're still seeing very strong low cap rates.

we're still seeing very strong, low cap rates on smaller type assets. And so we're feeding more of our properties into the sale market because we can reinvest those at higher spreads, higher yields.

On on smaller type assets and so we're.

<unk> more of our properties into the into the cell market because we can.

Reinvest those at higher and higher spreads higher yields.

So we're going to do that. So right now we're seeing the pricing very strong for smaller assets, and I think that's really because what you're seeing is people want to get out of the way of the bond market.

So we're going to do that so right now we're seeing the pricing very strong for smaller assets and I think that's really because what youre, saying is people want to get out of the way in the bond market. So if you're a fixed income investor and you know the bonds are going to be a bad deal you'd rather.

John Albright: If you're a fixed income investor and you know that bonds are gonna be a bad deal, you'd rather, you know, basically swap into a strong real estate asset with a long lease at a higher yield, and you have the inflation protection of the real estate. I think you're seeing that sort of movement where capital is moving out of bonds and into real estate for better yield and asset protection. We're basically gonna take our time on the acquisition side, and we're not seeing anything right now. We're not seeing any good deals right now that may come later in the year. We're kind of being patient about it.

So if you're a fixed income investor and you know that bonds are gonna be a bad deal, you'd rather basically swap into a strong real estate asset with a long lease at a higher yield and you have the inflation protection of the real estate.

Basically swap into a strong.

Real estate asset with a long lease at a higher yield and you have the inflation protection of the real estate. So I think youre seeing that sort of movement, where capital is moving out of bonds and into real estate for a better yield and asset protection.

So I think you're seeing that sort of movement where capital is moving out of bonds and into

real estate for better yield and asset protection. And so we're basically going to take our time on the acquisition side and we're not

And so we're basically going to take our time on the acquisition side and we're not we're not seeing anything right now we're not seeing any good deals right now that that may come later in the year. So we're kind of being patient about it.

We're not seeing anything right now, we're not seeing any good deals right now that may come later in the year, so we're kind of being patient about it. On the multi-tenanted side, since we're active on that at CTO, you are seeing buyer hesitancy, so maybe that will come on the net lease side, but we haven't seen it yet. So, sorry for the long winded. No, no, that's helpful. Thank you guys, I appreciate the time. Thanks, Rob.

John Albright: On the multi-tenant side, since we're active on that at CTO, you are seeing, you know, buyer hesitancy, so maybe that will come on the net lease side, but we haven't seen it yet. Sorry-

On the multi tenanted side since we're active on that as CTO. You are seeing you know buyer hesitancy. So maybe that will come on the net lease side, but we haven't seen it yet so long winded.

Rob Stevenson: Okay.

John Albright: For the long-winded.

Rob Stevenson: No, no, that's helpful. Thank you, guys. Appreciate the time.

Helpful. Thank you guys appreciate the time thanks.

John Albright: Thanks, Rob.

Thanks, Rob.

Operator 3: Our next question comes from Wes Golladay with Baird.

Operator: Our next question comes from Wes Golladay with Baird.

Our next question comes from Wes Golladay with Baird.

Wes Golladay: Hey, good morning, guys. I'd like to dig in more on this asset recycling you're gonna do in the H2 of the year. What type of spread are you looking between what you're buying and what you're selling? Will this be a big part of the strategy going forward?

Hey, Yeah. Good morning, guys I'd like to dig in more on this asset recycling you're going to do.

Hey, good morning guys. I'd like to dig in more on this asset recycling you're going to do in the second half of the year. What type of spread are you looking between what you're buying and what you're selling and will this be a big part of the strategy going forward?

During the second half of the year what type of spread are you looking between what you are buying and what you are selling and will it be a big part of the strategy going forward.

John Albright: You know, it'll be a big part of the strategy if we still see great opportunity to sell properties at lower cap rates than we would be a buyer and the ability to reinvest at higher spreads. We'll do that all day. In general, I would say it's about 100 basis point spread between what we're selling and what we're buying. Could be a little higher.

You know, it will be a big part of the strategy if we still see great opportunity to sell properties at lower cap rates than we would be a buyer, and the ability to reinvest at higher spreads. So we'll do that all day. But in general, I would say it's about a 100 basis point spread between what we're selling and what we're buying. It could be a little higher.

It will be a big part of the strategy, if we still see great opportunity to sell a property that at lower cap rates than we would be a buyer and the ability to reinvest that at higher spreads. So we'll do that all day.

But in general I would say it's about 100.

This point spread between what we're selling and what we're buying could be a little higher.

Wes Golladay: I guess, what type of friction would you have from transaction costs? How much would that eat into that?

And I guess, what type of friction would you have from transaction costs and how much would that eat into that?

And I guess, what type of friction would you have some transaction costs, how much would that eat into that.

John Albright: I don't know. It's not material, I mean, you know, material maybe in the eyes of the beholder. It's not bad. I wouldn't think that would be a gating issue.

I don't know, it's not, I mean, it's not material, given, I mean, material may be in the eyes of the beholder. It's not bad. I wouldn't think that that would be a gating issue.

Oh, it's not it made its not material given.

John Albright: I don't know. It's not material, I mean, you know, material maybe in the eyes of the beholder. It's not bad. I wouldn't think that would be a gating issue.

Material, maybe in the eyes of Beholder.

It's not not not bad I wouldn't think that that would be a gating issue.

Wes Golladay: Okay. When we look through the leverage, maybe towards the end of the year, once you're done with the asset recycling, what do you think that can get to?

Okay. And then when we look through the leverage, maybe towards the end of the year, once you're done with the asset recycling, where do you think that can get to?

And then when we look through the leverage maybe towards the end of the year once you're done with the asset recycling and what do you think that can get to.

John Albright: You know, based on current guidance, we're projecting it to be at or below 7x net debt to EBITDA.

You know, based on current guidance, we're projecting it to be at or below seven times net death even.

Based on current guidance, we're projecting it to be at or below seven times net debt to EBITDA.

Wes Golladay: Okay. Last one for me. With the office sale now complete, would you have any more OpEx or reimbursements in the income statement?

Okay, and then last one for me I know what the office sell now complete would you have any more opex for reimbursement in the income statement.

Okay. And then last one for me. With the office sale now complete, would you have any more op-ex or reimbursements in the income statement?

John Albright: No, we don't have any operating expenses beyond what existed in the Q1. There is a little bit of leakage in there, not much that'll continue on some assets that we own. With specifically the Hilton property from Q4, the higher leakage asset is now out of the portfolio.

No, we don't have any operating expenses beyond what existed in the first quarter. So there is a little bit of leakage in there. Not much that will continue on some assets that we own, but with specifically the Hilton property from Q4, the higher leakage asset is now out of the portfolio.

No we don't have any any operating expenses.

And what existed in the first quarter. So there is a little bit of leakage in there.

Not much that'll that'll continue on some assets that we own but.

With specifically the Hilton property from Q4.

The higher linkage asset is now out of the portfolio.

Wes Golladay: Great. I'll hop back in the queue. Thanks, guys.

Great I'll hop back in the queue. Thanks, guys.

John Albright: Thanks.

Operator 3: Our next question comes from Anthony Hau with Truist Securities.

Operator: Our next question comes from Anthony Hau with Truist Securities.

Our next question comes from Anthony Hau with Truest Securities.

Our next question comes from Anthony Howe with Truist Securities.

Anthony Hau: Good morning, guys. Thanks for taking my question. John, how would you describe the assets that you're planning to sell this year, and where do they rank in terms of quality within the portfolio?

Good morning, guys. Thanks for taking my question.

Good morning guys, thanks for taking my question. John , how would you describe the assets that you're planning to sell this year and where do they rank in terms of quality within the portfolio?

John how would you describe the assets that you're planning to sell this year and where do they rank in terms of quality within the portfolio.

John Albright: Well, I think, you know, my view is that the investors and maybe research analysts don't view some of the assets that we're looking to sell as being high quality. We know that the locations are such high quality that they will get premium pricing. We're looking to, you know, just impress our investors and with the fact that, you know, PINE has a very strong portfolio and people may wake up one day and be surprised at the valuations we get on the disposition side.

Well, I think my view is that the investors and maybe research analysts don't view some of the assets that we're looking to sell.

Well I think.

My view is that the investors and maybe research analysts don't view some of the assets that we're looking to sell as being high quality, but we know that the locations are such high quality that they will get premium pricing. So we're looking to just impressed.

as being high quality, but we know that the locations are such high quality that they will get premium pricing.

So we're looking to just impress our investors and with the fact that Pine has a very strong portfolio and people may wake up one day and be surprised at the valuations we get on the disposition side. So not to dodge your questions with names and so forth, but it'll probably be not core type names as far as credit.

Our investors and with.

With the fact that.

<unk> has a very strong portfolio and people may wake up one day and be be surprised that the valuations we get on the disposition side, so not to Dodge your questions with names and so forth, but it will probably be not core type names like as far as credits.

John Albright: Not to dodge your questions with names and so forth, but it'll probably be not core type names, as far as credits, and just, you know, really it's just more pruning the portfolio with, you know, locations that are not getting properly, appropriately valued in the public markets.

and it's just more pruning the portfolio with locations that are not getting appropriately valued in the public market.

And just you know really it's just more pruning the portfolio with locations that are not getting <unk>.

Properly are appropriately valued in the public markets.

Anthony Hau: Gotcha. Is there a certain sector that you're planning to reduce your exposure given the hyperinflation environment?

Gotcha.

Gotcha. Is there a certain sector that you're planning to reduce your exposure given the hyperinflation environment?

Is there a certain sector that youre planning to reduce our exposure given the.

Given the hyper inflation environment.

John Albright: You know, look, we were early on in selling casual dining. You know, we sold Outbacks over the last couple of years. We didn't have a lot of them. We had 2. It wasn't that was kind of before inflation started going crazy, but labor costs were going up. We felt like casual dining would be really in the bull's eye of labor costs and if inflation took off. You know, kind of there on both of those issues. That's one that we've kind of, you know, went away from. You know, we only own 1 car wash. You know, that could be a disposition kind of candidate.

John Albright: You know, look, we were early on in selling casual dining. You know, we sold Outbacks over the last couple of years. We didn't have a lot of them. We had two. It wasn't that was kind of before inflation started going crazy, but labor costs were going up. We felt like casual dining would be really in the bull's eye of labor costs and if inflation took off. You know, kind of there on both of those issues. That's one that we've kind of, you know, went away from. You know, we only own one car wash. You know, that could be a disposition kind of candidate.

You know, look, we were early on in selling casual dining, you know, we sold Outbacks over the last couple of years, we didn't have a lot of them, we had two, but that was kind of before inflation started going crazy, but labor costs were going up.

Look we were early on in selling casual dining.

We sold out backs over the last couple of years, we didn't have a lot of them we had to but we we are we it was one that was kind of before inflation started going crazy, but labor costs were going up. So we felt like casual dining would be really in the bull's eye of labor costs and and if inflation.

So we felt like casual dining would be really in the bullseye of labor costs and if inflation took off. And so we're kind of there on both of those issues.

<unk> took off and so you know we're kind of there on both of those issues. So that's that's one that we've kind of.

That's one that we've kind of went away from. And then we only own one car wash. And so that could be a disposition kind of candidate. That's kind of a discretionary spend item in our view. And it's certainly not an ESG-friendly type of asset, but we only have one of those.

Went away for them and then we.

We only own one carwash.

And so that could be a disposition candidate.

John Albright: You know, that's kind of a discretionary spend item in our view, and certainly not an ESG-friendly type of asset, but we only have one of those.

That's kind of a discretionary spend item in our view and certainly not our ESG friendly type of asset, but will I am one of those.

Anthony Hau: Gotcha. Last one for me. Matt, given where rates are headed, what's the plan for the variable debt exposure? Should we assume that 90% of the balance sheet will be fixed by year-end?

Gotcha.

Gotcha. And last one for me, Max, given where rates are headed, what's the plan for the variable debt exposure? Should we assume that 90% of the balance sheet will be fixed by year end?

Last one for me masks, given where rates are headed what's the plan for the variable that exposure shall we assume that 90% of the balance sheet will be fixed by year end.

Matt Partridge: Yeah, we're gonna be opportunistic on fixing the existing variable rate debt. You know, we wanna have some balance on the revolver because as we sell assets, or in the event that we raise additional equity, we want the ability to pay down that floating rate debt versus having it locked in and having the equity drag. I would tell you, my strong preference is to have fixed rate debt versus variable rate debt over the long term. There's a lot of volatility with the forward curve and where forward swaps are pricing. Depending on market headlines and what's happening in the world, if we see a point where we can lock in at a reasonable forward rate on the existing variable rate debt, we'll look to do that.

Yeah, we're going to be opportunistic on fixing the existing variable rate debt. We want to have some balance on the revolver because as we sell assets or in the event that we raise additional equity, we want the ability to pay down that floating rate debt versus having it locked in.

Yes, we're going to be opportunistic on fixing the existing variable rate debt.

We want to have some balance on the revolver because as we sell assets.

Or in the event that we raise additional equity we want the ability to pay down that floating rate debt versus having it locked in in.

and having the equity drag. But I would tell you my strong preference is to have fixed rate debt versus variable rate debt over the long term. And there's a lot of volatility with the forward curve and where forward swaps are pricing. So depending on market headlines and what's happening in the world, if we see a point where we can lock in at a reasonable forward rate on the existing variable rate debt, we'll look to do that. Thank you.

And having the the.

The equity drag.

But I would tell you my strong preference is to have fixed rate debt versus variable or variable rate debt over the long term and there's a lot of volatility with the forward curve and where forward swaps or pricing.

Depending on market headlines and what's happening in the world. If we see a point, where we can lock in at.

A reasonable.

Forward rate on the existing variable rate debt, we'll look to do that.

Anthony Hau: Okay. Gotcha. Thanks, guys.

Okay got you thanks, guys.

Matt Partridge: Thanks.

John Albright: Thank you.

Thank you.

Operator 3: Our next question comes from Michael Gorman with BTIG.

Operator: Our next question comes from Michael Gorman with BTIG.

Our next question comes from Michael Gorman with BTG.

Our next question comes from Michael Gorman with BTIG.

Michael Gorman: Yeah, thanks. Good morning. John, I know you mentioned that you're not seeing much change in terms of the buyer behavior and on the net lease side of things, but obviously a solid Q1 in terms of deal volume and in terms of yields. I'm just curious, kind of what you're seeing out there on the volume side that's allowing you to source the strong Q1 and then to give you the confidence as you go through the year in a relatively volatile environment, that you'll have kind of the offset acquisitions for these dispositions that you're planning.

Yes. Thanks, Good morning, John I know you mentioned that Youre not seeing much change in terms of the buyer behavior on the net lease side of things, but obviously, a solid first quarter in terms of deal volume and in terms of yields and I'm just curious.

Yeah, thanks. Good morning, John . I know you mentioned that you're not seeing much change in terms of the buyer behavior and on the net lease side of things, but obviously a solid first quarter in terms of deal volume and in terms of yields. And I'm just curious kind of what you're seeing out there on on the volume side that's allowing you to source.

Kind of what Youre seeing out there on the volume side Thats, allowing you to source.

I guess the source of the strong first quarter and then to give you the confidence as you go through the year in a relatively volatile environment that youll have kind of the offset acquisitions for these for the dispositions that you are planning.

to source the strong first quarter and then to give you the confidence as you go through the year in a relatively volatile environment that you'll have kind of the offset acquisition.

John Albright: Yeah. I would say, look, you know, with the volatility, that's gonna be in our favor, that's gonna kick out the marginal buyer. I have no issues, no problems with being able to find acquisitions or, you know, so I think, you know, we have a great deal team, small deal team with great relationships. Whether we get, you know, kind of, you know, hit with a special situation where somebody needs to close by a certain time, and they really need a group that can focus on it, you know. We are, you know, we're very confident that we can kinda dial up the volume when we need it.

Yeah, I would I would say look you know with the volatility that's going to be in our favor that is going to kick out the marginal buyer.

Yeah, I would, I would say, look, you know, with the volatility, that's going to be in our favor. That's going to kick out the marginal buyer. And so, so I have no, no issues, no problems with being able to find acquisitions or, you know, so I think.

And so so I have no no issues no problems with being able to find acquisitions are.

So I think.

You know, we have a great deal team, small deal team with great relationships and

We have a great deal team small deal team with great relationships and and whether we get kind of hit with a special situation, where somebody needs to close by a certain time and they really need a group that can focus.

And whether we get kind of hit with a special situation where somebody needs to close by a certain time and they really need a group that can focus on it. So we are very confident that we can kind of dial up the volume when we need it. Right now, as we've gotten a lot done early on.

On it so so.

We are we're very confident that we can kind of dial up the volume when we need it right.

John Albright: Right now, you know, as we've gotten a lot done early on, we're in a good position to kind of sit back and take our shots when we, you know, see good value.

Right now.

As we've gotten a lot done early on we're in a good position to kind of sit back and take our shot so when we see good value.

we're in a good position to kind of sit back and take our shots when we see good value.

Michael Gorman: Okay. I guess maybe just on the supply side, have you seen any pickup in supply in the marketplace, whether it's rate volatility, having sellers concerned about future valuations or sellers that maybe have debt maturities coming up? Have you seen an increased amount of product out there?

Okay, and then I guess, maybe just on the supply side.

Okay, and then I guess maybe just on the supply side, have you seen?

Have you seen.

any pickup in supply in the marketplace, whether it's rate volatility, having sellers concerned about future valuations or sellers that maybe have debt maturities coming up. Have you seen an increased amount of product out there?

Any pickup in supply in the marketplace, whether it's rate volatility, having sellers concerned about future valuations or sellers that maybe have debt maturities coming up have you seen an increased amount of product out there.

John Albright: What we've seen is, we haven't seen a great deal of more product come on the market because of what you just said. I just got back from ULI in San Diego, LA flight last night. You know, brokers are definitely telling their clients that if you wanna sell something, you need to get it to market as soon as possible 'cause who knows, you know, who knows what could happen. I do expect more supply to come on. If you're a seller this year, why wait? That sort of thing. I would expect more, but we're not seeing it yet.

What we've seen is, we haven't seen a great deal of product, more product come on the market because of what you just said, but I just got back from ULI in San Diego on a late flight last night, and brokers are definitely telling their clients that if you want to sell something, you need to get it to market as soon as possible because who knows what could happen. So I do expect. We'll see what happens.

What we've seen is we haven't seen.

A great deal of product more product come on the market because of what you just said, but I just got back from you ally in San Diego on like flight last night and brokers are definitely telling their clients that if you want to sell something you need to get it to market as soon as possible because who knows who knows.

What could happen so I do expect.

um more supply to come on if if you're a seller this year why wait um that sort of thing so so um i would expect more but we're not seeing it yet

More supply to come on if you're a seller this year why wait that sort of thing. So so I would expect more but we're not seeing it yet.

Michael Gorman: Okay. That's helpful. Just last one for me, a little bit away from the transactions. Obviously, a lot of talk about inflation on the call, generally in the economy, labor shortages, cost of employees, all those things. You've kind of put a framework around how you think about internalizing management for PINE and on a go forward. Does the current environment and the rising costs on a G&A side change that kind of framework in terms of where you think the appropriate size is to look at internalizing the structure?

Okay. That's helpful. And then just last one for me a little bit away from the transactions.

Okay, that's helpful. And then just last one for me, a little bit away from the transaction.

Obviously, a lot of talk about inflation on the call generally in the economy labor shortages cost of employees all those things you've kind of put a framework about around how you think about internalizing management for Pi and on a go forward.

obviously a lot of talk about inflation on the call generally in the economy labor shortages uh... cost of employees all the

kind of put a framework about around how you think about internalizing management for for pine on a go forward that the current environment

Just the current environment and the rising cost.

On a GNA side, change that kind of framework in terms of where you think the appropriate size is to look at internalizing the structure.

On the G&A side change that that kind of framework in terms of where you think the appropriate size is to look at internalizing the structure.

John Albright: Not really. We've recently looked at the cost structure, and it was, you know, marginally higher than maybe we thought about, you know, at IPO. You know, someone like Matt doesn't come any cheaper these days, for sure. Maybe we'll have to, you know, have a cheaper CEO or something like that. I would say it's marginally gone up for sure. It doesn't really change the dynamics of the size that we need to be for that. Clearly, we understand, you know, the value proposition and the market of an internalized structure. That isn't lost upon us.

Not really we recently looked at the cost structure.

Not really, we recently looked at the cost structure and it was marginally higher than maybe we thought about at IPO.

And it was marginally higher than maybe we thought about at IPO.

You know, someone like Matt doesn't come any cheaper these days, for sure. So maybe we'll have to, you know, have a cheaper CEO or something like that. But, you know, so I would say it's marginally gone up, for sure, but, you know, it doesn't really change the dynamics of the size that we need to be for that, and clearly we understand.

So unlike math doesn't come many cheaper these days for sure.

So maybe we'll have to.

I have a cheaper CEO or something like that.

But.

So I would say, it's marginally gone up for sure.

But it doesn't really change the dynamics of the size that we need to be for the for that and clearly we understand.

you know, the value proposition in the market of an internalized structure. So that isn't lost upon us. So I think the timing is just really kind of, you know, size, you know, we just need to get there. So it's, you know, not a burdensome cost structure.

You know the value proposition in the market.

Internalized structure, so that isn't lost upon us. So I think the timing is just really kind of size, we just need to get there. So so it's.

John Albright: I think the timing is just really kind of, you know, size, you know, we just need to get there. It's you know not a burdensome cost structure.

Not a burdensome cost structure.

Michael Gorman: That's helpful. Thanks for the time, guys.

That's helpful. Thanks for the time guys.

John Albright: Sure.

Sure.

Operator 3: Our next question comes from Jason Stewart with Jones Trading.

Operator: Our next question comes from Jason Stewart with Jones Trading.

Our next question comes from Jason Stewart with Jones trading.

Our next question comes from Jason Stewart with Jones Trading.

Jason Stewart: Thanks. Good morning. Most of the questions have been answered. I wanted to pull up a little bit and get your thoughts on sort of a medium-term outlook for cap rates in the net lease sector, given the move we've had in rates year to date.

Craig Kucera: Thanks. Good morning. Most of the questions have been answered. I wanted to pull up a little bit and get your thoughts on sort of a medium-term outlook for cap rates in the net lease sector, given the move we've had in rates year to date.

Thanks. Good morning, most of the questions have been answered I wanted to pull up a little bit and get your thoughts on sort of a medium term outlook for cap rates in the net lease sector given the move we've hadn't rates year to date.

Thanks. Good morning. Most of the questions have been answered. I wanted to pull up a little bit and get your thoughts on sort of a medium-term outlook for cap rates in the net lease sector given the move we've had in rates year-to-date.

John Albright: Yeah, I mean, so as I mentioned, you know, we're still seeing very strong cap rates on things that we're looking to sell, and surprisingly so. We have talked with, as I mentioned on call, at ULI, and people are really seeing the pricing, you know, gap out or expand out on more assets that had gotten really tight and had more of a financing component. If you think about it, you know, like multifamily, you know, that's, you know, the leverage there has been part of bringing down cap rates. Because leverage is so important to the multifamily side, that's where, you know, the market's seen a lot of disruption right now, I think.

Yeah I mean.

Yeah, I mean, so, as I mentioned, you know, we're still seeing very strong cap rates on things that we're looking to sell, and surprisingly so. We have talked with, as I mentioned on a call, that ULI, and people are really seeing the pricing. And, you know, we're still seeing very strong cap rates on things that we're looking to sell, and surprisingly so. We have talked with, as I mentioned on a call, that ULI, and people are really seeing the pricing.

So as I mentioned, we're still seeing very strong cap rates on things that were looking to sell in.

And surprisingly so we we have talked with.

As I mentioned on the call is that July and people are really seeing the the pricing.

you know, gap out or expand out on more assets that had gotten really tight and had more of a financing component.

GAAP out or expand out on more assets that had gotten really tight and had had more of a financing component. So if you think about it like multifamily.

So if you think about it, you know, like multifamily, you know, that's, you know, the leverage there is, it has been part of bringing down cap rates and because leverage is so important to the multifamily side.

The leverage there as it has been part of bringing down cap rates and because leverage is so important to multifamily side.

That's where the market has seen a lot of disruption right now I think so on on the on the single tenant net lease since it's driven a lot by the 10 31 win with no leverage it really hasnt, we really haven't seen any kind of volatility that you might expect we hope to see that volatility is.

That's where the market's seeing a lot of disruption right now, I think. So on the single tenant in that lease, since it's driven a lot by the 1031 with no leverage, we really haven't seen any kind of volatility that you might expect. We hope to see that volatility as a greedy investor and buyer of assets, so we hope to see...

John Albright: On the single tenant net lease, since it's, you know, driven a lot by the 1031 with no leverage, we really haven't seen any kind of volatility that you might expect. We hope to see that volatility as, you know, a greedy investor and buyer of assets. We hope to see some disruption and opportunity. That's why we'll be patient to see if we get some of those shots.

Agreed investor and buyer of assets. So we hope to see some disruption and opportunity and so that's why I will we will be patient to see if we get some of those shots.

some disruption and opportunity. And so that's why we'll be patient to see if we get some of those shots.

Jason Stewart: Okay. I guess we'll wait to see what happens there. On the CTO ownership side, can you remind us of the plan, whether there are any limitations to how much CTO can own of PINE?

Okay.

Okay. I guess we'll wait to see what happens there. And then on the CTO ownership side, can you remind us of the plan, whether there are any limitations to how much CTO can own upon?

I guess, we'll wait to see what happens there and then on the CTO ownership side can you remind us of the the plan whether there are any limitations to how much CTO chinone upon.

John Albright: Hey, Jason. CTO currently owns about 15% of Pine. The limitation is really dictated by the REIT structure and some of the tax rules around that from an ownership perspective. CTO currently can own up to 11% of Pine's REIT shares, which would be in addition to the OP units that it currently holds.

Yeah. Hey, Jason. CTO currently owns about 15% of Pine. The limitation is really dictated by the REIT structure and some of the tax rules around that from an ownership perspective, so CTO currently can own up to 11% of Pine.

Yes.

Hey, Jason CTO currently owns about 15% of pine.

The limitation is really dictated by the REIT structure and some of the tax rules around that from an ownership perspective. So CTO currently can own up to 11% of pines.

<unk> shares which would be in addition to the LP units that apparently holds.

which would be in addition to the OP units that it currently holds.

Jason Stewart: Okay. Thank you.

Okay. Thank you.

John Albright: Thank you.

Thank you.

Operator 3: Our next question comes from Craig Kucera with B. Riley Securities.

Operator: Our next question comes from Craig Kucera with B. Riley Securities.

Our next question comes from Craig Kucera with B Riley Securities.

Yeah.

Craig Kucera: Hey, good morning, guys. John, you had mentioned last quarter that you had some reverse inquiries on potential asset sales. Have those inbound calls continued or accelerated in the last few months?

Hey, good morning guys. John , you had mentioned last quarter that you had some reverse inquiries on potential asset sales. Have those inbound calls continued or accelerated in the last few months?

Hey, good morning, guys.

John You had mentioned last quarter that you had some reverse inquiries on potential asset sales.

Had those inbound calls continued or accelerated in the last few months.

John Albright: We certainly get, you know, a regular stream of those calls. We really have, you know, with the market kind of like in disruption and our stock really not acting very favorably, we decided to be more proactive in hiring brokers and testing the waters, if you will, on assets. We have been very pleasantly surprised on the pricing and the amount of interest. We'll continue to keep on taking advantage of that sort of, you know, market environment. Then that'll help us set up to be ready to redeploy at higher spreads after properties close. You know, that's kind of a three-month process at least. We're taking our time.

We certainly get.

We certainly get a regular stream of those calls.

Regular stream of those calls.

But we really have, you know, with the market kind of like in disruption and our stock really not acting very favorably, we decided to be more proactive in hiring brokers and testing

But but we really have.

With the market kind of like in disruption in our stock really not acting very favorably, we decided to be more proactive and hiring brokers and testing. The waters. If you will on an assets and we have been very pleasantly surprised on on the <unk>.

the waters if you will on assets and we have been very pleasantly surprised on the pricing and the amount of interest.

<unk> and the the amount of interest and so we'll continue to keep on taking advantage of of that sort of.

And so, we'll continue to keep on taking advantage of that sort of, you know, market environment. And then that will help us set up to be ready to redeploy at higher spreads after, you know, properties close. So, you know, that's kind of a three-month process, at least, and we're taking our time. We're not, you know, trying to sell it super fast or what have you, but it's just a regular year.

Market environment.

And then that will help us set up to be ready to to redeploy at higher and higher spreads. After properties closed. So that's kind of a three month process at least in work and we're taking our time, we're not we're not trying to sell a super fast or what have you, but it's just a regular a regular kind of.

John Albright: We're not, you know, trying to, you know, sell it super fast or what have you, but it's just a regular kind of, you know, methodical movement here. When we've talked about before when we had reverse inquiries, that kind of started us off on this where we do have some properties in the sale process that started with reverse inquiries. That got us saying, "Hey, you know, well, let's see if the market really prices, you know, such and such property at a, you know, extreme valuation." That's kind of a little bit of context behind it.

a regular kind of methodical movement here, and when we talked about before when we had reverse inquiries, that kind of started us off on this, where we do have some properties in the cell process that started with reverse inquiries, and so that got us saying, hey, well, let's see if...

Methodical movement here and when we've talked about before when we had reverse inquiries that kind of started us off on this where we are we do have.

Some properties in the sale process is started with reverse inquiries and so that that got us, saying, hey, let's see if the market really prices.

The market really prices such and such property at an extreme valuation, so that's a little bit of context behind it.

And such property.

Extreme valuation, so that's kind of a little bit of context behind it.

Craig Kucera: No, that's helpful. I appreciate it. Just stepping back, you guys have, you know, pretty much been on a tear from an acquisitions perspective for the last four quarters. It sounds like maybe we should expect, at least from an acquisition perspective, for things to maybe slow down here in Q2, as you kind of wait for things to settle down and then maybe reaccelerate in the H2. Is that fair?

No that's helpful. I appreciate it.

No, that's helpful. I appreciate it. Just stepping back, you guys have pretty much been on a tear from an acquisitions perspective for the last four quarters, but it sounds like maybe we should expect, at least from an acquisition perspective, for things to maybe slow down here in the second quarter as you wait for things to settle down and then maybe re-accelerate in the back half of the year. Is that fair?

And just stepping back you guys have pretty much been on a tear from an acquisitions perspective for the last four quarters, but it sounds like.

Maybe we should expect at least from an acquisition perspective for things to maybe.

Slow down here in the second quarter as you kind of wait for things to settle down and then maybe reaccelerate in the back half of the year is that fair.

John Albright: Yeah, that's fair. I mean, I've told the acquisition team we're in no rush to, you know, try to impress the market with acquisition volume. We know we can do it when we want to, but we want to really see what kind of pain is out there as possible, and we'll take our time.

Yeah. That's fair I mean, we are told the acquisition team where no rush to to.

Yeah, that's fair. I mean, we are told the acquisition team, we're in no rush to, to, you know, try to impress the market with acquisition volume. We know we can we can do it when we want to, but we want to really see what what kind of pain is out there as possible. And so we'll take our time.

Try to impress the market with our acquisition volume. We know we can we can do it when we want to but we want to really.

See what what kind of pain is out there.

Possible and so we'll take our time.

Craig Kucera: Got it. Just one more from me. Are you making any update on the grocery development site in Jacksonville?

Got it and just one more for me.

Got it. Just one more for me. Are you making any update on the grocery development site in Jacksonville?

You are you, making any update on the grocery development site in Jacksonville.

John Albright: Yeah, good question. I do have an update, but we haven't discussed it. Let's just say it's basically back on track. And the real reason why it's been delayed is negotiating with Old Time Pottery and the new grocer, and getting all of that done just really took some time. I mean, everyone's been busy, I guess, in this environment. To get two groups together to figure out, you know, how logistics and how it all works out. That's all been done. Why don't you look, we'll give an update on next quarter on timing and so forth.

Yeah.

Yeah, um, um, good question. Um, I do have an update, but we haven't discussed it. Let's just say it's, it's basically back

Good question.

Do have an update but we haven't discussed it let's just say, it's it's basically back on track.

And really the timing, the reason why it's been delayed is negotiating with old-time pottery.

In the really the the timing the the reason why its been delayed is the negotiating with old time pottery, and the new grocer and getting all of that.

and the new grocer, and getting all that done just really took some time. I mean, everyone's been busy, I guess, in those environments, so to get

John just really took some timing.

Everyone's been busy I guess in this environment, so to get two groups together to to figure out how it logistics and how it all works out. So that's all been done. So why don't you look we'll give an update on next quarter on timing and so forth.

two groups together to uh... to figure out you know how logistics and how it all works out so that's all been done so uh... why don't you look that will give an update on next quarter on on timing and so forth

Craig Kucera: Okay. Thanks, I appreciate it.

Okay. Thanks I appreciate it.

John Albright: Yep.

Yes.

Operator 3: Our next question comes from Andrew Lavery, an individual investor.

Operator: Our next question comes from Andrew Lavery, an individual investor.

Our next question comes from Andrew Labrie, an individual investor.

Our next question comes from Andrew Lavery, an individual investor.

Yeah.

Andrew Lavery: Hi, everybody. How you doing?

[Analyst]: Hi, everybody. How you doing?

Hi, everybody how are you doing.

John Albright: Good.

Andrew Lavery: Just had a question with regards to ESG. What does the board and senior leadership think about ESG and stakeholder capitalism as a whole?

[Analyst]: Just had a question with regards to ESG. What does the board and senior leadership think about ESG and stakeholder capitalism as a whole?

Good question with regards to ESG, what does the board and senior leadership think about ESG and stakeholder capitalism as a whole.

I have a question with regards to ESG. What does the board and senior leadership think about ESG and stakeholder capitalism as a whole?

John Albright: You know, we're very mindful of ESG. Obviously, we have a slide on our investor deck that you should take a look at. One thing we're very proud of is, you know, at CTO, the manager of Pine, we've planted 170,000 pine trees in Florida over the last couple of years, and we have brought on diversity on our boards. We're you know, as a small company, we're basically very mindful of it, and we're very proud of what the progress we've made. We obviously know that it's a big issue and keep on thinking of what we can do to keep moving that forward.

Uh, you know, so, so we're very mindful of ESG. Obviously we have a slide on our investor deck that.

So we're very mindful of ESG, obviously, we have a slide on our investor deck that you should take a look at one thing we're very proud of as a.

you should take a look at. One thing we're very proud of is.

At CTO, the manager of pine, we've planted 170,000 pine trees in Florida.

At CTO of the manager of Pine, we've we planted 170000 pine trees in Florida over the last couple of years and we have.

over the last couple of years, and we have brought on diversity on our boards.

<unk> brought on diversity in our on our boards and so we're we're you know as a small company we're.

And so we're, we're, you know, as a small company, we're

uh... you know basically very mindful of it and we're very proud of what uh... progress we've made but uh... we also know that the big issue and keep on thinking of what we can do uh... to keep moving that forward

Basically very mindful of it and we're very proud of what the progress we've made but we all know that's a big issue and keep on thinking of what we can do.

Keep moving that forward.

Andrew Lavery: Okay. With a follow-up question, if I may. You mentioned how you in the portfolio is one car wash property and how that's not very ESG friendly. I'm assuming it's not ESG friendly just because of the amount of water it uses, the wastewater it produces and such. Now if you offloaded that property due to just kinda ESG, I don't know, a way to put it, I suppose, now assuming too, if that property is paying rent on time consistently, you know, it provides good diversification to overall portfolio and you decide to sell it because of ESG, do you feel you're fulfilling your fiduciary responsibility to the shareholder?

[Analyst]: Okay. With a follow-up question, if I may. You mentioned how you in the portfolio is one car wash property and how that's not very ESG friendly. I'm assuming it's not ESG friendly just because of the amount of water it uses, the wastewater it produces and such. Now if you offloaded that property due to just kinda ESG, I don't know, a way to put it, I suppose, now assuming too, if that property is paying rent on time consistently, you know, it provides good diversification to overall portfolio and you decide to sell it because of ESG, do you feel you're fulfilling your fiduciary responsibility to the shareholder?

OK, with a follow-up question, if I may, you said you mentioned how you in a portfolio is one car wash property and how that's not very ESG friendly. I'm assuming it's not ESG friendly because of the amount of water it uses, the wastewater it produces and such.

With a follow up question if I may.

Hey, you mentioned, how your portfolio is one car wash property.

And how that's not very ESG friendly I'm, assuming it's not ESG friendly basis because of the amount of water. It uses the wastewater it produces and such.

Now, if you offloaded that property due to just kind of ESG kind of guidance, I guess, is the way to put it, I suppose.

Now if you offload to that property due to just kind of ESG kind of top of our guidance I guess is the way to put it I suppose.

Would you do feel you'd be you know, assuming to if that property is paying rent on time consistently You know, it provides good value to the overall portfolio and you decide to sell it because of ESG Do you feel you're fulfilling your fiduciary responsibility to the shareholder?

Would you do you feel you'd be now assuming too if that property is paying rent on time consistently.

It's a good guide to the overall portfolio and you decided to sell it because of ESG you feel you're fulfilling your fiduciary responsibility to the shareholder.

John Albright: What we won't sell it if we don't get a really good price, so we're not letting the tail wag the dog. We are very sure, very, you know, basically shareholder friendly as far as value. We think that we can basically do, you know, hit two birds with, you know, one rock, if you will, that we can get a very good price for that because of the ground lease and it's a very strong market. You know, we'll let shareholders, investors, and research analysts decide whether car washes are ESG friendly or not. We won't have the. That was just a commentary that, you know.

So what we won't sell it if we don't get a really good price, so we're not letting.

So what we won't sell it if we don't get a really good price. So we're not letting.

the tail wag the dog, so we're very basically shareholder friendly as far as value, but we think that we can basically hit two birds with one rock, if you will, that we can get a very good price for that because of the ground lease.

The tail wag the dog so we're very sure.

Very basically shareholder friendly as far as value, but we think that we can basically do.

Hit two birds with one rock if you will that we can we can get a very good price for that because of the ground lease and it's a very strong market.

And it's a very strong market. And we'll let shareholders, investors, research analysts decide whether car washes are ESG friendly or not. That was just a commentary that we use a lot of water, and people are concerned about water.

And.

Let we'll let shareholders investors research analysts aside whether car washes are ESG friendly or not we will.

It was just a commentary that you know.

Andrew Lavery: Okay.

[Analyst]: Okay.

John Albright: It uses a lot of water and people are concerned about water.

It uses a lot of water and people were concerned about water.

Andrew Lavery: Well, I would say too that, you know, if you did sell it and it was purely for environmental reasons, and you know, you say you got a good price for it, but

[Analyst]: Well, I would say too that, you know, if you did sell it and it was purely for environmental reasons, and you know, you say you got a good price for it, but

Well, and I would say to that, you know, if you did sell it, and it was for purely for environmental reasons, and you know, you say you got a good price. So, yeah, I just answered the question, Andrew. Yeah, but so we're not we're not selling it because, you know, we won't sell it at a high cap rate because it uses water.

And I would say to you that if you did sell it and it was for purely for environmental reasons and you say you got a good price. So yeah I just answered the question, Andrew but yes. So we're not we're not selling it because.

John Albright: Yeah, I just answered the question, Andrew.

Andrew Lavery: Yeah, but.

[Analyst]: Yeah, but.

John Albright: We're not selling it because, you know, we wouldn't sell it at a high cap rate because it uses water.

We won't sell it at a high cap rate because it is water.

Andrew Lavery: Well, I'm just saying that you would. If someone else is gonna buy it and it's still gonna use a lot of water. I'm not saying. That's what I wanted to point out. Just one final comment. I noticed on the investor relations page, I believe we own 129 properties now. Is that correct?

[Analyst]: Well, I'm just saying that you would. If someone else is gonna buy it and it's still gonna use a lot of water. I'm not saying. That's what I wanted to point out. Just one final comment. I noticed on the investor relations page, I believe we own 129 properties now. Is that correct?

I'm, just saying that if.

Well, I'm just saying that someone else is going to buy it and it's still going to use a lot of water. So I'm not saying that's what I wanted to point out. And just one final comment I noticed on the investor relations page. I believe we own 129 properties now, is that correct?

Someone else who's going to buy it and you're still going to use a lot of water. So I'm not saying that's why I wanted to point out and just one final comment I noticed on the Investor Relations page I believe we own 129 properties now is that correct.

John Albright: It was 129 at quarter end. With the Wells Fargo sale after quarter end, it's dropped back down to 128.

It was $129 at quarter end, but with the Wells Fargo sale, after quarter end, it's dropped back down to $129.

John Albright: It was 129 at quarter end. With the Wells Fargo sale after quarter end, it's dropped back down to 128.

It was 129 at quarter end, but with the Wells Fargo sale after quarter end, it's dropped back down to 128, Okay, Alright, perfect. Yes, I saw it in the quarterly earnings report.

Andrew Lavery: Okay. I see. All right, perfect. Yeah, 'cause I saw in the quarterly earnings report, it said 129, and then on the investor relations page it said 128. I just wanted to make sure there wasn't a discrepancy there. That's all. Thank you.

John Albright: Okay. I see. All right, perfect. Yeah, 'cause I saw in the quarterly earnings report, it said 129, and then on the investor relations page it said 128. I just wanted to make sure there wasn't a discrepancy there. That's all. Thank you.

Okay, all right, perfect. Yes, I saw in the quarterly earnings report, it said $129 and then on the investor relations page, it said $128. So I just wanted to make sure there wasn't a discrepancy there. That's all. Thank you. Yep. Thank you. Thank you.

Is that a 129 and then on the Investor Relations pages at 128, So I just wanted to make sure there wasn't a discrepancy there. That's all thank you. Thank you. Thank you.

John Albright: Yep. Thank you.

Andrew Lavery: Thank you.

[Analyst]: Thank you.

Operator 3: That concludes today's question and answer session. I'd like to turn the call back to John Albright for closing remarks.

Operator: That concludes today's question and answer session. I'd like to turn the call back to John Albright for closing remarks.

That concludes today's question and answer session I would like to turn the call back to John Albright for closing remarks.

That concludes today's question and answer session. I'd like to turn the call back to John Albright for closing remarks.

John Albright: I just wanna say thank you for attending the call and look forward to follow-up questions. Thank you.

Just wanted to say thank you for attending the call and look forward to follow up questions. Thank you.

I just want to say thank you for attending the call and look forward to follow-up questions. Thank you.

Operator 3: This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Q1 2022 Alpine Income Property Trust Inc Earnings Call

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