Good morning everyone. And thank you for joining us today for the Alpine Income Property Trust second 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. 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, earnings release and most recent investor presentation which contain reconciliations of non-GAAP financial measures we use on our website at alpinereit.com. With that, I will now turn the call back over to John.

Thanks, Matt. And good morning, everyone. As we discussed in our first quarter earnings call, we believe we will have an opportunity to acquire high-quality properties at more favorable pricing in the back half of the year as the rising interest rate environment, challenged debt market, and volatile macroeconomic backdrop puts upward pressure on cap rates. As a result, we emphasize capital recycling in the second quarter where we locked in attractive pricing on our asset dispositions and then redeployed the proceeds into better risk-adjusted opportunities with stronger tenant credits and more favorable cap rates. During the quarter, we sold $73 million of properties at a blended cap rate of 7.1%, generating gains on sale of $15.6 million or $1.15 per share. This includes the previously announced sale of our loan remaining office property that generated a gain of $7 million. If we remove the office property from our disposition statistics, we sold $34 million of retail assets at a blended cap rate of 5.8%, generating more than $8.5 million of gains. Given that office investments are no longer part of our portfolio, we think that retail-only execution is a more relevant mark-to-market of our portfolio and highlight the excellent quality of the real estate we've been able to acquire over two and a half years. The retail property dispositions were largely focused on non-rated or below investment-grade tenants where we had elevated exposure to both the tenant and the sectors in which they operate. The sold properties were leased to Sportsman's Warehouse, At Home, Hobby Lobby, and Cheddar's Scratch Kitchen, allowing us to reduce concentrations in the sporting goods, home furnishing general merchandise, and casual dining sectors. On the acquisition front, we've emphasized discount and value-oriented retailers that should benefit from consumers becoming more price-conscious as they look to maximize their buying power, as they grapple with significant inflation pressures and a rising cost of capital. During the quarter we acquired 19 properties located in nine states leased to industry-leading operators such as Best Buy, Little Caesars, LA Fitness, Dollar General, Dollar Tree, and Family Dollar. Our second quarter acquisitions were purchased at a weighted average cap rate of just over 7%, resulting in a very attractive net investment spread relative to the 5.8% cap rate on our retail property dispositions. Year-to-date, we've acquired 35 net lease properties for $109 million at a weighted average going in cash cap rate of 6.9% in a weighted average remaining lease term at acquisition of 9.4 years. Subsequent to the end of the quarter, we sold our scrubbies carwash in Jacksonville, Florida for a 4.8% cap rate and we have invested the remaining disposition proceeds that were on our balance sheet in the form of 1031 restricted cash into a property leased to Lowe's. With all the ins and outs related to our year-to-date transaction activity, our 100% retail portfolio is now much more comparable to our peers who currently have much higher valuation multiples. As we continue to sell at low cap rates and reinvest at higher yields, we're confident we'll be able to incrementally delever our balance sheet, improve our overall property metrics, and drive higher quality FFO and AFFO per share. I'll now let Matt talk about our performance in the quarter, capital market activities, and increased guidance.

Thanks, John. Operationally, our portfolio remains 100% occupied, and with nearly 85% of our rents coming from publicly traded companies, we have excellent visibility into our tenants' corporate-level operating trends and credit metrics, which have remained strong throughout the year. Second quarter 2022 FFO was $0.47 per share, a $0.09 per share, or 23.7% increase compared to the second quarter of 2021. Second quarter 2022 AFFO was also $0.47 per share, an $0.08 per share, or 20.5% increase over the second quarter of 2021. Year-to-date FFO was $0.97 per share and AFFO was $0.95 per share, representing a year-over-year per share growth of 23% and 16% respectively when compared to the first six months of 2021. General and administrative expenses for the quarter, which includes the $948,000 management fee to our external manager, totaled $1.5 million. This was a year-over-year increase of 15%, largely driven by increases to our management fee from our second half of 2021 and year-to-date 2022 equity capital market activities and was positively offset by second quarter year-over-year revenue growth of 71%. G&A as a percentage of revenues in the second quarter was down to 13.1%, down from 13.3% in the first quarter and a year-over-year decrease of approximately 640 basis points. For the second quarter of 2022, the company paid a cash dividend of $0.27 per share, representing an 8% year-over-year increase over the company's Q2 2021 cash dividend and a current annualized yield of approximately 6%. Second quarter FFO and AFFO payout ratios were very healthy at 57%, and we anticipate announcing our regular quarterly cash dividend for the third quarter towards the end of August. During the second quarter, we issued 87,000 shares of common stock through our ATM program for total net proceeds of $1.6 million, and an average issuance price of $19.09 per share. We ended the quarter with net debt to total enterprise value of 54%, net debt to pro forma EBITDA of 8.3 times, which was down half a turn from the end of the first quarter, and we continue to maintain a very healthy fixed charge coverage ratio of nearly five times. While we do anticipate a broader economic slowdown in the back half of the year, we did increase our full-year FFO and AFFO per share guidance. Our prior guidance assumed more deleveraging in the second quarter than materialized, which is driving a lower projected weighted average share count for the year, offset by further increases to our interest rate assumptions to account for steepening of the yield curve. We brought down the top end of our acquisition guidance to account for the second quarter results. And we're meaningfully increasing our disposition guidance to reflect continued confidence in our ability to sell assets at attractive valuations, allowing us to generate positive net investment spreads on the redeployment of proceeds. We begin the third quarter of 2022 with portfolio-wide in-place annualized straight line base rent of $39.6 million and in-place annualized cash base rent of $38.7 million. These values are before the sale of the scrubbies car wash and acquisition of the Lowe's that occurred in July that John referenced earlier. We now expect to acquire between $215 million and $235 million of retail net leased properties during 2022, which is subject to market conditions and for which we still believe acquisitions will occur at a similar or better blended yield than our 2021 full-year acquisition cap rates. As we looked at match funder acquisition activity through Creative Capital recycling, our disposition guidance has been increased by $50 million at the low end to $125 million at $75 million at the high end to $175 million. Our full-year 2022 FFO and AFFO guidance ranges were increased by $0.05 at the low end and high end, with the weighted average share count for the year being lowered by 1 million shares at the low end and 2 million shares at the high end. 2022 FFO is now projected to be between $1.50 and $1.65 per share. And our full-year 2022 AFFO guidance range was increased to $1.58 to $1.63 per share. I'll now pass it back to John for his closing remarks.

Thanks Matt. The liquidity of our assets, attractiveness of our real estate, transparency and performance of our tenants and the stability of our cash flows have us well positioned. We built what we believe is the highest quality real estate-focused portfolio in the public net lease sector. The quality of the assets really shows in the valuation we've been able to achieve with our property sales. And we're confident our portfolio will continue to perform well, even in the volatile, broader economic environment. We appreciate all of our team's hard work and continued support of our shareholders. At this time, we'll open it up for questions.

Hey, guys, congrats on a good quarter. Filling in for Jason Stewart this morning. So in terms of rent escalation, what's the visibility? I know last quarter, you guys said about 50% of the portfolio can be increased 75 to 125 basis points. Is it still kind of in that range? Or is it trending towards the lower side given the macro environment?

Hey, Matt, it's Matt. Good to hear from you. In general, I think that 75 to 125 is a good range. It's going to depend year-to-year on what lease is rolling over. I don't think that range has changed with the transaction activity. So I think that's a good run rate going forward.

Awesome. And then another one on dispositions. Are you guys still looking to rotate out of the low credit kind of tenants and then roll those into better opportunities going forward?

Yes, I think maybe you can expect us to do more of the same moving forward. So we have quite a bit more opportunity to keep generating some really healthy gains on some properties that have low cap rates and then recycle that into higher cap rates and into higher quality tenants.

Got you. So you still kind of seeing the cap rates, not in the 5.5% to 6% range on dispositions?

Yes, I mean, it's been amazing. We thought maybe we'd see a little bit more expansion on the cap rates, but on the smaller property sales, you're really seeing a lot of high net worth and some institutional investors buying these properties at cap rates that really haven't changed much from six months ago, so we're still seeing a good opportunity to recycle here.

Got you. And then are those in specific locations? Or does it just kind of depend?

It is not anything locational. It's really about where we see the ability to achieve really some incredible low cap rate execution or opportunities to get decent cap rate execution but selling off a lower credit tenant, which improves the portfolio going forward. We'll do a kind of a barbell effect, we'll sell properties with really low cap rates but then we'll sell some of the lower credits and improve the portfolio. And in that mixture, we'll still have a very attractive disposition cap rate and a recycling opportunity with higher credit.

Awesome, thank you guys.

Guys, good morning. Hey, John. So the high end of the disposition guidance represents a third of the current portfolio. If getting the portfolio to your pristine state doesn't close the valuation gap that you hoped for, by year end or early next year, what is the next step for Pine? Is strategic alternative that is something that the board needs exploring?

Look, if we have more to go, as mentioned, yes, if we get this into an extremely pristine condition and we're still trading kind of where we're trading, of course, we'll explore those alternatives because it makes no sense to just keep going if we're not really connecting with investors. We have a lot of great value investors, but the folks that need bigger companies are showing a lot of appreciation for the portfolio value. We're trading at a discount to NAV and if we keep creating a better and better portfolio, of course, we would look at those sorts of scenarios.

And is there a timeline that you guys would give yourself?

No, I think it will be self-evident after a couple quarters of more recycling and improving the portfolio. If you look at our slide deck, investor presentation, we're the lowest multiple. And if you look at our credit composition, we have the same credit composition as the highest multiple companies out there, and we have better locations. Just given a small company, you can do that. So if we don't resonate with the people that are able to buy this portfolio at $159 a foot and the pure average is $250 a foot and our implied cap rate is seven and the others in your model, then it's clear we need to look at other alternatives.

And how much more can you do in terms of disposition after this year? Because $175 at the high end represents a third of the portfolio?

Yes, I don't think there'll be a ton more beyond that. I think we're going for the low-hanging fruit, and it won't cut into the core for sure. So, this is really trimming around the edges, even though it's a third of the portfolio, just trimming around the edges and showing all the embedded profit in these properties. And so, look it resonates with the value folks. We had awesome performance last year and fairly decent performance this year. So it's not like we don't have any unhappy investors. People would like to see it move to a better multiple, which we share that, but we think we can get there by continuing to show the strength of our portfolio.

Good morning, guys. Is At Home and Hobby Lobby down off the top 10 tenants with the sale? Or did you own multiple locations of those?

They're still in the top 10. They've moved towards the bottom end of the top 10. And we own multiple locations.

Okay. And then the Lowe's, was it at a ground lease or sort of building and land? What was the remaining lease term there? And what type of cap rate do you guys buy that at?

No, yes, so it was not a ground lease, Rob. It was building and land. There was approximately 10 years remaining on the lease, and it was called a low to mid-sixes cap rate.

Okay, what is the annualized base rent in the portfolio today?

After the acquisition of the Lowe's, the annualized base rent is $40.2 million.

Okay. Because I guess the question winds up being, that I'm leading to is, if the dispositions weren't, at the very end, and you sort of you did have some sales, etcetera. But how do you go from, is there anything abnormal about the back half of the year to take you from call the 47 in the second quarter? Obviously, there's some impact of dispositions. But the high end of the guidance essentially implies something around $0.34 or $0.35 for each of the last two quarters of the year. Is that the acceleration of dispositions? How do you get there with what you've done here today?

Yes, so I think it's fair to assume that there's an acceleration of dispositions, and we want to maximize the cap rates that we can achieve in the market. If we're assuming, which we've said, that there's going to be a slowdown in the back half of the year and an expansion of cap rates, we want to get those dispositions done sooner. And on top of that, there are assumed equity raises in the guidance, sort of end of Q3 beginning of Q4 to further deleverage. So the disposition guidance is a pretty wide range, and the share count does assume a decent amount of shares arriving towards the end of the year. That's what's driving the lower sequential earnings per share.

Okay, and we are not likely to see any material level, certainly not as much as you did in the second quarter of acquisitions in the third quarter, that the acquisitions when they happen are more likely to be fourth quarter weighted then. So you're going to be high disposition, net disposition, third quarter, and then a net acquire in the fourth quarter?

Other than the Lowe's, I would say that most of the acquisitions will probably occur toward the end of Q3. And then obviously, we're firming up the pipeline for Q4, but we're assuming that they're going to be back-end weighted, which is usually how the transaction market works.

Okay. And then just finally, given that comment, what was the rough dollar amount or the dollar amount of the Lowe's transaction? How material was that? $10 million, $20 million, what are we looking at?

$14 million.

Hey, good morning, guys. Just one question. Most of my questions have been answered. But, Matt, your comments you talked about that incorporated in guidance is sort of the expectation of a broader economic slowdown, which we've already started to see. But just curious, I mean, clearly, you guys have been upgrading the portfolio and improving diversification, sort of preparing for this potential slowdown. And just curious if there are any categories you'd like to further reduce, or any categories you sort of got on the watch list.

I'll take that RJ. So, I mean, we'll certainly reduce where it makes sense, as far as, whether it's casual dining, that sort of sector, but the ones that we have are really terrific locations, and the lease rates are below market. In fact, we've had tenants come to us for early renewals, and we've declined them. It's really about the portfolio and where they're located on a case-by-case basis. So where there's a situation where it's maybe a little bit more tertiary location and a tenant that would be challenged or in a recession, we'll certainly look to move through that sooner rather than later. We're in pretty good shape. There's nothing that really stands out to us that we're not already kind of contemplating and working on. So you'll probably see more of this next quarter as far as what we've addressed in it. Pretty good cap rates, we think so, we're working on those.

Yes, and RJ, sorry, I was saying from a targeted sectors perspective, I mean we do like the off-price retail sector, particularly discount retailers like the dollar stores. And obviously, we like the home improvement space, which has seen multiple years of a tailwind. Those are a few of the sectors where we're putting dollars to work.

Thanks. And then just as a follow-up, can you talk about what you're seeing in terms of competition? Obviously, you're coming into the disposition markets, still pretty attractive in terms of finding some high net worth individuals. But obviously, we've heard that a lot of the levered buyers have left the market just given the increased debt costs. I'm curious what you guys are seeing out there in terms of competition and where do you think the market shakes out as we move into 2023 about the competitive landscape?

Yes, we hope that it will be better hunting where there will be less competition, but actually, the market is pretty strong. If you consider the macro backdrop, where we're focusing is on developers who may have had debt that's going to be harder for them to roll over or they're acquiring properties and want to sell off some pad sites. It's very challenging for them to get acquisition financing on the secured side. That's where we're likely to see more opportunities to bring in great properties, whereas the general market is still very strong. You're seeing a very, very efficient market where we were a little surprised, we thought there'd be a bit more disconnect.

Yes, hey, good morning, guys. Looking at your top tenants list, there was some movement. Did you entirely exit exposure to any tenants in the second quarter from sales such as Sportsman's Warehouse?

No, we still have one more Sportsman's Warehouse, and we still continue to have exposure to Darden, At Home, and Hobby Lobby.

Got it? And I guess was this the last quarter, Matt, that you're expecting to receive any form of COVID repayment?

Yes, we have received all of the deferred rent repayment agreements that were put in place.

Great. And I'm just curious, you've had this outparcel you got, I believe in Jacksonville, that you were looking to potentially develop. Has the change in the economy changed any of the timing or considerations for that potential development?

Yes, so that one, the tenant definitely still wants to be there. We're still in conversations, but we're not seeing any help with construction costs. Construction costs are still elevated. So it's an ongoing conversation with the tenant as they need to pay more rent for us to get the yield we would want. So that's an ongoing conversation, but hopefully construction costs come down and help us on that side as well.

Okay, great. Thanks, guys.

Thank you.

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