• FFO (Funds from Operations): $0.41 per share, a 13.9% increase over Q1 2023.

• AFFO (Adjusted Funds from Operations): $0.42 per share, a 16.7% increase over Q1 2023.

• Total Revenue: Increased by 11.7%, primarily driven by interest income from loan portfolio.

• Dividend: Paid a cash dividend of $0.275 per share, annualized yield over 7.25%.

• Share Repurchase: Over 45,000 shares repurchased for $800,000 at an average price of $16.90 per share.

• Net Debt to EBITDA: 7.4 times.

• Fixed Charge Coverage Ratio: 3.4 times.

• Liquidity: Total liquidity at quarter end was $185 million.

• Portfolio Occupancy: 99% with 138 properties across 35 states.

• Investment Grade Tenants: 65% of total annualized base rents from investment grade tenants, up 700 basis points from last year.

• Investment Guidance for 2024: Range of $50 to $80 million, contingent on market conditions.

• Disposition Guidance for 2024: Between $50 million and $80 million.

• Warning! GuruFocus has detected 8 Warning Signs with PINE.

Release Date: April 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Can you give us any color about your upcoming rental rate increases over the balance of the year and if you expect any lease turnovers during the same? A: We have very little lease turnover this year, with only a theater in Reno at the end of November, resulting in just one month of lag. Overall, we expect about a 1% annual increase in rent escalations across our portfolio.

Q: How do you look at the priority for capital deployment between acquiring new retail loans versus share repurchase, especially in a depressed transaction environment? A: We balance between opportunistic loan opportunities, which offer high risk-adjusted yields, and share repurchases. The decision is revisited quarterly by the board based on market conditions and stock opportunities.

Q: Is there an upper boundary for how big of a loan exposure you would want to have over the next year or two? A: Our credit facilities limit our loan activity, setting an upper boundary of about $10 million above our current position. We may recycle some loans as opportunities arise, but the aggregate amount would be in the mid $50 million range.

Q: Given the reluctance of sellers, how robust is the market for buyers of your disposition assets, and could this be a delaying factor in selling some assets this year? A: There is a fair amount of capital becoming more productive on the acquisition side. The 1031 market remains efficient, especially for properties below $5 million, indicating an active market for dispositions.

Q: Regarding the Boston Market tenant, what is the mark-to-market on that lease? A: The next tenant for the Boston Market property is expected to bring in about 20% higher rents, indicating a positive mark-to-market scenario.

Q: How much of the more attractive acquisition environment is reflected in your current pipeline, and what is the timing for your acquisition volumes? A: We are bidding on many properties but conservatively, as we assess sellers' motivations. Significant acquisitions are more likely pushed to the third and fourth quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.