Alpine Income Property Trust Inc

Previous wording

Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, the strength of the real estate market; the impact of a prolonged recession or downturn in economic conditions; our ability to successfully execute acquisition or development strategies; credit risk associated with us investing in commercial loans and investments; any loss of key management personnel; changes in local, regional, national and global economic conditions affecting the real estate development business and properties, including unstable macroeconomic conditions due to, among other things, geopolitical conflicts, inflation, and rising interest rates; the impact of competitive real estate activity; the loss of any major property tenants; the ultimate geographic spread, severity and duration of pandemics, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential

Current wording

Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, the strength of the real estate market; the impact of a prolonged recession or downturn in economic conditions; our ability to successfully execute acquisition or development strategies; credit risk associated with us investing in commercial loans and investments; any loss of key management personnel; changes in local, regional, national and global economic conditions affecting the real estate development business and properties, including unstable macroeconomic conditions due to, among other things, geopolitical conflicts, inflation, and rising interest rates; the impact of competitive real estate activity; the loss of any major property tenants; the ultimate geographic spread, severity and duration of pandemics, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and our financial condition and results of operations; and the availability of capital. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.

Previous wording

As of March 31, 2024, we owned 138 properties with an aggregate gross leasable area of 3.8 million square feet, located in 35 states, with a weighted average remaining lease term of 6.9 years. Our portfolio was 99% occupied as of March 31, 2024.

Current wording

As of June 30, 2024, we owned 137 properties with an aggregate gross leasable area of 3.8 million square feet, located in 34 states, with a weighted average remaining lease term of 6.6 years. Our portfolio was 99% occupied as of June 30, 2024.

Previous wording

We may also acquire or originate commercial loans and investments associated with commercial real estate located in the United States. Our investments in commercial loans are generally secured by real estate or the borrower’s pledge of its ownership interest in an entity that owns real estate. During the three months ended March 31, 2024, the Company originated one commercial loan with a total funding commitment of $7.2 million. As of March 31, 2024, the Company’s commercial loan investments portfolio included three construction loans and one mortgage note with a total carrying value of $38.0 million.

Current wording

We may also acquire or originate commercial loans and investments associated with commercial real estate located in the United States. Our investments in commercial loans are generally secured by real estate or the borrower’s pledge of its ownership interest in an entity that owns real estate. As of June 30, 2024, the Company’s commercial loan investments portfolio included four construction loans and one mortgage note with a total carrying value of $44.7 million.

Previous wording

Revenue from our property operations during the three months ended March 31, 2024 and 2023, totaled $11.5 million and $11.2 million, respectively. The $0.3 million increase in lease income is primarily attributable to an increase in reimbursable revenue. The direct costs of revenues for our income properties totaled $1.9 million and $1.4 million during the three months ended March 31, 2024 and 2023, respectively. The $0.5 million increase in the direct cost of revenues is reflective of increased reimbursable expenses as well as a portion of portfolio expenses being non-recoverable pursuant to tenant leases.

Current wording

Revenue from our property operations totaled $11.3 million during the three months ended June 30, 2024 and 2023. Our relatively flat revenues is primarily due to the Company’s recycling of assets during the periods. The direct costs of revenues for our income properties totaled $1.8 million and $1.6 million during the three months ended June 30, 2024 and 2023, respectively. The $0.2 million increase in the direct cost of revenues is reflective of increased reimbursable expenses as well as a portion of portfolio expenses being non-recoverable pursuant to tenant leases and certain vacancies in our properties currently held for sale.

Previous wording

Interest income from commercial loans and investments totaled $0.9 million for the three months ended March 31, 2024. The income is attributable to three loans originated by the Company during the year ended December 31, 2023 as well as one loan originated during the three months ended March 31, 2024. There were no commercial loans and investments generating interest income during the three months ended March 31, 2023.

Current wording

Interest income from commercial loans and investments totaled $1.0 million for the three months ended June 30, 2024. The income is attributable to three loans originated by the Company during the year ended December 31, 2023 as well as two loans originated during the six months ended June 30, 2024. There were no commercial loans and investments generating interest income during the three months ended June 30, 2023.

Previous wording

Other revenue totaled $0.1 million for the three months ended March 31, 2024. The revenue is attributable to fees earned from a revenue sharing agreement the Company entered into with CTO as further described in Note 18, “Related Party Management Company” in the Notes to the Financial Statements. There were no revenue sharing agreements generating income during the three months ended March 31, 2023.

Current wording

Other revenue totaled $0.2 million for the three months ended June 30, 2024. The revenue is attributable to fees earned from a revenue sharing agreement the Company entered into with CTO as further described in Note 19, “Related Party Management Company” in the Notes to the Financial Statements. There were no revenue sharing agreements generating income during the three months ended June 30, 2023.

Previous wording

Investment and other income totaled $0.1 million and less than $0.1 million during the three months ended March 31, 2024 and 2023, respectively. The increase is attributable to higher interest rates on bank deposits.

Current wording

Investment and other income totaled $0.1 million during the three months ended June 30, 2024 and 2023. Investment and other income is attributable to interest earned on bank deposits.

Previous wording

Interest expense totaled $2.9 million and $2.6 million during the three months ended March 31, 2024 and 2023, respectively. The $0.3 million increase in interest expense is attributable to the higher average outstanding debt balance during the three months ended March 31, 2024.

Current wording

Interest expense totaled $2.8 million and $2.4 million during the three months ended June 30, 2024 and 2023, respectively. The $0.4 million increase in interest expense is attributable to the higher average outstanding debt balance as well as $0.1 million of interest expense resulting from the sale of participation interest in the Company’s $23.4 million Mortgage Note during the three months ended June 30, 2024.

Previous wording

General and administrative expenses totaled $1.5 million during the three months ended March 31, 2024 and 2023. The $0.1 million decrease in the management fee is attributable to a decrease in the Company’s equity base. The $0.1 million increase in additional general and administrative expenses is attributable to increased activity in states with franchise fees as well as an increase in audit and tax fees.

Current wording

General and administrative expenses totaled $3.1 million and $3.2 million during the six months ended June 30, 2024 and 2023, respectively. The $0.1 million decrease in the management fee is attributable to a decrease in the Company’s equity base as the result of recent share repurchases. The $0.1 million increase in additional general and administrative expense is primarily the result of additional state and local tax payments, as the result of the Company owning more properties in states with franchise tax fees.

Previous wording

During the three months ended March 31, 2024, the Company recorded a $0.03 million impairment charge representing the provision for losses related to our income properties as further described in Note 7, “Provision for Impairment”. There were no impairment charges on the Company’s income property portfolio during the three months ended March 31, 2023.

Current wording

During the six months ended June 30, 2024, the Company recorded a $0.7 million impairment charge of which $0.1 million represents the CECL reserve related to our commercial loans and investments and $0.6 million represents the provision for losses related to our income properties as further described in Note 7, “Provision for Impairment”. There were no impairment charges on the Company’s income property portfolio during the six months ended June 30, 2023.

Previous wording

Depreciation and amortization expense totaled $6.4 million and $6.3 million during the three months ended March 31, 2024 and 2023, respectively. The $0.1 million increase in the depreciation and amortization expense is reflective of the increase in asset value of the Company's property portfolio.

Current wording

Depreciation and amortization expense totaled $12.7 million and $12.8 million during the six months ended June 30, 2024 and 2023, respectively. The $0.1 million decrease in the depreciation and amortization expense is reflective of the timing of property acquisitions for the Company's property portfolio each quarter.

Previous wording

Net loss totaled $0.3 million and net income totaled $3.7 million during the three months ended March 31, 2024 and 2023, respectively. The $4.0 million decrease in net income is attributable to the factors described above, most notably the decrease in the gain on disposition of assets of $4.5 million.

Current wording

Net loss totaled $0.1 million and net income totaled $3.8 million during the six months ended June 30, 2024 and 2023, respectively. The $3.9 million decrease in net income is attributable to the factors described above, most notably the decrease in the gain on disposition of assets of $4.3 million.

Previous wording

Cash totaled $8.0 million as of March 31, 2024, including restricted cash of $2.8 million. See Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance as of March 31, 2024.

Current wording

Cash totaled $6.4 million as of June 30, 2024, including restricted cash of $3.1 million. See Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance as of June 30, 2024.

Previous wording

*Long-Term Debt.*As of March 31, 2024, the Company had an outstanding balance of $73.0 million on the $250 million revolving Credit Facility. The Company also had $200.0 million in term loans outstanding as of March 31, 2024. See Note 12, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance at March 31, 2024.

Current wording

*Long-Term Debt.*As of June 30, 2024, the Company had an outstanding balance of $69.0 million on the $250 million revolving Credit Facility. The Company also had $200.0 million in term loans outstanding as of June 30, 2024. See Note 13, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance at June 30, 2024.

Previous wording

*ATM Program.*During the three months ended March 31, 2024, the Company did not sell any shares under the 2022 ATM Program.

Current wording

*ATM Program.*During the six months ended June 30, 2024, the Company sold 3,350 shares under the 2022 ATM Program for gross proceeds of $0.1 million at a weighted average price of $16.02 per share, generating net proceeds of $0.1 million.

Previous wording

*Capital Expenditures.*As of March 31, 2024, the Company had no commitments related to capital expenditures for the maintenance of fixed assets, such as land, buildings, and equipment. The Company is committed to fund three construction loans as described in Note 4, “Commercial Loans and Investments”. The unfunded portion of the construction loans totaled $6.5 million as of March 31, 2024.

Current wording

*Capital Expenditures.*As of June 30, 2024, the Company had no commitments related to capital expenditures for the maintenance of fixed assets, such as land, buildings, and equipment. The Company is committed to fund four construction loans as described in Note 4, “Commercial Loans and Investments”. The unfunded portion of the construction loans totaled $5.9 million as of June 30, 2024.

Previous wording

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, proceeds from the completion of the sale of assets utilizing the reverse like-kind 1031 exchange structure, $109.5 million of availability remaining under the 2022 ATM Program, and $177.0 million of available capacity on the existing $250.0 million Credit Facility.

Current wording

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, proceeds from the completion of the sale of assets utilizing the reverse like-kind 1031 exchange structure, $109.5 million of availability remaining under the 2022 ATM Program, and $181.0 million of available capacity on the existing $250.0 million Credit Facility.

Previous wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have

Current wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon