ALPINE Q3 2026 EARNINGS CALL - ALPINE INCOME PROPERTY TRUST INC

Explicit Guidance:

• FY2026 FFO: Raised to $2.19–$2.21 per diluted share (previously $2.10–$2.13), representing approximately 17% growth at the midpoint versus FY2025.
• FY2026 AFFO: Raised to $2.22–$2.24 per diluted share (previously $2.12–$2.15).
• Investment Volume: FY2026 capital deployment assumed between $310 million and $350 million (up from prior estimates), driven by accelerated investment activity and expected timing of deals/financings.
• Management Fees: Quarterly base management fee run rate adjusted to approximately $1.5 million following recent equity issuance.
• Q4 Run Rate: Projected run rate of ~$0.53/share for Q4 before acquisition impact, expected to stabilize near $0.55/share with the closing of the industrial portfolio.

Business-Segment Outlook:

• Industrial Portfolio: Expect closure of a $117.3 million, 19-property industrial portfolio in the mid-4th quarter 2026. Portfolio includes 1.9M sq. ft. across 11 states, 100% leased to 9 tenants, 100% triple-net, with a weighted average remaining lease term of 10.2 years and no expirations before late 2031. In-place rents deemed below market with annual escalations.
• Property Portfolio: Currently 130 properties (4.8M sq. ft.); management expects "selective recycling" of lower-yielding properties to fund higher-yield opportunities post-quarter-end (e.g., $7.9M Burlington acquisition).
• Loan Portfolio: Target size is ~20% of total undepreciated asset value. Active repayment of $8.2M in Q4 and a $7.4M loan maturing in Q4; unfunded commitments ($75M) to be drawn gradually over the next two years, net of maturing loans.
• Divestitures: Plans to "prune" the portfolio via asset sales, including potential spin-offs from the new industrial portfolio and sales of underperforming retail assets (e.g., Walgreens, Sportsman's Warehouse, Party City lease replacement) to manage leverage.

Market and Competitive Outlook:

• Cap Rates & Pricing: Belief that current environment creates seller motivation to "clear the deck," presenting opportunities for higher yield potential. Cap rates on the new industrial deal reflect the higher interest rate environment.
• Asset Class Strategy: Industrial remains a non-strategic, opportunistic "one-off" acquisition; primary focus remains on net lease retail with "good yield and limited downside." Openness to other sectors if risk-adjusted yields are favorable.
• Residential Land Loans: Specific exposure to second/third/fourth-home communities viewed as resilient to high interest rates due to high-net-worth buyer cash flows.

Macro / Industry Outlook:

• Interest Rates & Swaps: A $100M SOFR swap (2.05%) maturing Jan 2027 will be replaced with a forward swap at ~3.54% (+150 bps); a $50M swap maturing Jan 2027 is closer to market with minimal impact.
• Financing Costs: New $100M term loan to close late October with a rate of ~4.75% (Swapped); new revolving credit facility increase will initially raise pro forma leverage to low 7s (~7.3x) before potential paydowns.
• Capital Markets: Expect continued influx of capital from private equity groups entering the net lease space; external capital availability remains high provided equity markets remain supportive.

Strategic Initiatives:

• New Financing: Closing a $100M four-year term loan and $75M revolver increase in late October; proceeds will be used to pay down existing revolver debt.
• Capacity Additions: $175M in total new liquidity added to the balance sheet to fund the pending industrial deal and future investments.
• Leverage Management: Plan to reduce net debt-to-adjusted EBITDA (currently 6.5x) via a two-pronged approach: asset sales/dispositions and NOI growth from annual rent bumps and recycling capital.
• Portfolio Optimization: Continued focus on buying low-basis, high-yield properties and disposing of assets with lower cap rate attributes to optimize balance sheet structure.

Risks and Headwinds to Outlook:

• Timing Uncertainty: FFO guidance reflects assumptions on the timing of investment closings, dispositions, and financing activity; delays or accelerations in the industrial deal closing could shift quarterly run rates.
• Leverage Fluctuation: Pro forma leverage may temporarily increase to ~7.3x following new financing before stabilization through dispositions or asset sales.
• Market Volatility: Ability to execute external capital raises depends on stock performance and capital market conditions.
• Loan Book Variability: Net funding of the $75M commitment and loan book size are subject to variability based on repayment timing and maturing loan offsets.

Management Tone on the Future:

• Confidence: High confidence in "risk-adjusted yield" and "in-place rents below market" for the industrial acquisition.
• Cautious Optimism: Expresses excitement about the current market environment for acquirers ("good hunting") while emphasizing a disciplined approach to "pruning" the portfolio.
• Discipline: Reiterated commitment to buying only properties with "limited downside and nice upside," signaling a measured approach to the industrial expansion rather than a strategic pivot.

Miscellaneous:

• Q&A Details: Management confirmed the industrial portfolio pricing reflects the new rate environment; residential loan projects (high net worth) are deemed not interest-sensitive; no material early prepayments expected on the broader loan book beyond scheduled maturity.