Alpine Income Property Trust (PINE) is a retail Real Estate Investment Trust (REIT) that invests in owning and operating a portfolio of single-tenant, net leased commercial income properties. Lessees are largely high-quality public tenants, explains Marty Fridson, editor of Forbes/Fridson Income Securities.
The REIT’s tenants include the likes of Walmart, Lowes, Home Depot, Dick’s Sporting Goods, CVS, Walgreens, Dollar General, Best Buy, Tractor Supply, Darden Restaurants, 7-Eleven, and Advance Auto Parts. PINE’s portfolio is well diversified geographically, spread over 138 properties in 103 markets in 35 states as of 9/30/23.
The company continues to improve the credit quality of its tenant exposure; as of 9/30/23, 64% of tenants were investment grade, up from 49% a year earlier. On that date, occupancy stood at 99.1%, with strong prospects for remaining at a high level.
Specifically, occupancy costs for PINE’s portfolio tenants are materially below market rents, reflecting the inflationary pressure on building and land costs. This implies a high likelihood that tenants will exercise their renewal options at expiration.
On the financial side, PINE has a well-staggered debt maturity schedule, with $100 million due in 2026, $100 million in 2027, and $49 million in 2028. On 9/30/23, outstanding debt was down 7% from a year earlier.
The company has also grown its quarterly dividend by 37.5% since the beginning of 2020. PINE recently traded at $17.20 and an indicated yield of 6.4%. Distributions are taxed as ordinary income. We consider this common stock suitable for medium-risk tax-deferred portfolios.
