Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Alpine fourth quarter 2022 earnings conference call. Instructions. Joining us today are Mr. Matt Partridge, Chief Financial Officer, and Mr. John Albright, Chief Executive Officer. At this time, I would like to turn the conference over to Mr. Matt Partridge. Sir, please begin.

Good morning, everyone, and thank you for joining us today for the Alpine Income Property Trust fourth quarter and year-end 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 laws. 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 the 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’ll now turn the call over to John.

Thanks, Matt. We had a nice finish to the year, as we continue to execute on our accretive asset recycling program, reduce leverage, and improve the overall quality of our retail net lease portfolio. Our acquisitions during the quarter emphasize high-quality investment-grade-rated tenants, demonstrating strong operating trends in well-performing sectors such as grocery, home improvement, sporting goods, and dollar stores. In total, during the fourth quarter, we acquired seven properties for just under $42 million at a weighted average cap rate of 7.4%, and a weighted average remaining lease term of 8.2 years. Notably, 100% of the acquired rents come from tenants with an investment-grade rating, including the first Home Depot in our portfolio, as well as Family Dollar, Dollar Tree, DICK'S Sporting Goods, and Walmart. For the full year 2022, we acquired 51 retail net lease properties for just over $187 million at a weighted average going in cap rate of 7.1%, and a weighted average remaining lease term at acquisition of 8.7 years. Seventy-seven percent of the rents we acquired during the year were from tenants with an investment-grade credit rating, and more than half of the rents acquired are in MSAs with over a million people. While we did see cap rates move higher as we made our way through 2022, we've seen a decrease in the number of assets listed for sale in the market to start 2023, which is contributing to a higher or tighter bid-ask spread. Sellers with high-quality properties in strong markets with in-demand tenants and sectors have maintained conviction in their pricing expectations, and we're starting to see buyers being more aggressive as they look to put capital to work to start the year. This is resulting in cap rates either holding from where they were a few months ago, which is in spite of the higher interest rates, or in the case of investment-grade-rated tenants and smaller price point assets, we're starting to see cap rates compress because those assets are more easily financed at better terms, offer a hedge against continued inflation, and provide solid risk-adjusted returns in a relatively volatile macroeconomic environment. On the disposition front, we sold five properties for a total disposition volume of $31 million at a weighted average exit cap rate of 6.5%, generating total gains of $6.6 million. The dispositions include properties leased to Freddy's Frozen Custard, Big Lots, Rite Aid, and Harris Teeter. These sales, and the subsequent redeployment and nearly 100 basis-point net investment spread during the quarter, allowed us to drive a better return on equity while moving out of some of the assets where we felt we had incremental risk. The proceeds also provided us with attractively priced capital to put to work in the acquisition market that resulted in a higher yield and increased investment-grade-rated tenant exposure. Year-to-date, we've sold 16 properties for approximately $155 million at a weighted average exit cap rate of 6.5% or 5.9% when removing the impact of our last remaining office property we sold during the second quarter. These sales during the year generated gains of $34 million, and because we started this asset recycling process back in April, we've been able to maximize the value of the sold properties even as interest rates moved against us. As of the end of the year, our portfolio consisted of 148 properties totaling 3.7 million square feet, with tenants operating in 26 sectors within 34 states. Occupancy did tick lower and below 100% for the first time as a result of a vacant out parcel we acquired as part of a property acquisition in the fourth quarter. We ascribed no value to this vacant property at acquisition, but we're cautiously optimistic we can lease the asset to drive organic rent growth within the existing portfolio. Since our last earnings call in mid-October, DICK'S Sporting Goods is now our number two tenant, joining Walgreens, Family Dollar, Dollar Tree, Lowe's, and Dollar General as our top five tenants, all of whom carry investment-grade ratings. We enter 2023 with 54% of our total annualized base rents coming from tenants or the parent of a tenant with an investment-grade credit rating, which we anticipate will grow throughout the year as we continue to recycle out of non-investment-grade-rated tenants and into high-quality industry-leading retailers with balance sheets positioned to outperform in nearly any economic environment. We're hopeful that as our portfolio metrics start to better parallel our higher valuation multiple peers, we'll see an uptick in our own stock's valuation, reflecting the continuous refinement of our portfolio, our stock's increased liquidity, a de-risked balance sheet, and consistency of execution, as we've continued to drive attractive returns on equity for the benefit of all of our shareholders. Matt will outline the details of our 2023 guidance in a moment, but it's important to note that we do plan to continue our opportunistic approach to asset recycling. We've identified a number of properties that we think will garner strong pricing in the market as a result of the quality of the underlying real estate, allowing us to continue to generate attractive net investment spreads on the redeployment of the proceeds. I'll now turn the call over to Matt to talk about our performance in the quarter and the year, as well as our capital markets activities, improved balance sheet, and 2023 guidance.

Thanks, John. Starting with our top-line performance, total revenues grew 22% in the fourth quarter and 50% for the year when compared to the equivalent period in 2021, reflecting the benefit of accretive asset recycling and higher net investment spreads. General and administrative expenses for the year, which includes $3.8 million of management fees to our external manager, totaled $5.8 million. G&A as a percentage of total revenues in 2022 was 12.8%, a year-over-year decrease of nearly 400 basis points. We anticipate 2023 general and administrative expenses before the management fee to be approximately $2.1 million. The current annual run rate for the management fee before any assumed new equity issuance in 2023 is just under $4.3 million. FFO in the quarter was $0.37 per share, representing an 11.9% decrease compared to the fourth quarter of 2021. In Q4 2022, AFFO was $0.41 per share, which remained unchanged from the fourth quarter of 2021. The decrease in FFO and differential to AFFO was driven by a $443,000 extinguishment of debt charge relating to the defeasance and associated write-off of unamortized loan costs of our $30 million fixed property secured mortgage. For the full year, FFO was $1.73 per share, and AFFO was $1.77 per share, representing a year-over-year per share growth of 9.5% and 11.3%, respectively, when compared to the full year of 2021. Similar to the fourth quarter, the decrease in FFO in differential to AFFO was driven by $727,000 of extinguishment of debt charges relating to the defeasance and associated write-off of unamortized loan costs for the $30 million fixed property secured mortgage, and for the termination and recast of our unsecured revolving credit facility that occurred in the third quarter. As previously announced, the company paid a fourth quarter cash dividend on December 30th of $0.275 per share, representing a 1.9% year-over-year increase when compared to the company's Q4 2021 cash dividend, and the current annualized yield of approximately 5.4%. Overall, we increased our regular common stock cash dividend by 7.4% in 2022 while still maintaining a conservative FFO and AFFO payout ratio. Our fourth quarter FFO and AFFO payout ratios remain very efficient at 74% and 67%, respectively, and we anticipate announcing our regular quarterly common stock cash dividend for the first quarter of 2023 towards the end of February. Turning to the balance sheet, we made good progress reducing leverage closer to our long-term target. We ended the year with net debt to total enterprise value of 47%, net debt to pro forma EBITDA of 7.1 times, and we continue to maintain a very healthy fixed charge coverage ratio of 3.7 times. During the fourth quarter, we sold nearly 1.5 million shares through our ATM program for total net proceeds of $27.4 million. And during the full year of 2022, we sold 1.9 million shares through our ATM program for total net proceeds of $36 million. As I mentioned earlier, in December, we did defease the loan-secured mortgage on our balance sheet. The defeasance allowed us to unencumber the properties that secured the mortgage, of which we sold four of the six properties shortly thereafter. Following the secured mortgage payoff, our balance sheet is now completely unsecured. Subsequent to year end, we entered into a $50 million forward-starting interest rate swap that commences in March to fix SOFR for our outstanding revolving credit facility balance, effectively eliminating our remaining go-forward floating interest rate exposure. As of today, we have no debt maturities until 2026, no floating interest rate exposure, and ample capacity on our revolving credit facility to complement our accretive asset recycling program. For 2023, the initial guidance in our press release last night reflects the confidence we have in the quality of our portfolio while taking a reasonably cautious approach to the broader macroeconomic environment and underlying volatility in the capital markets. Our guidance relies on a number of significant assumptions, including but not limited to our ability to raise funds for investment at a reasonable cost of capital, our ability to acquire and sell assets at reasonable valuations, and the continued operational and financial strength of our tenants. We begin 2023 with portfolio-wide in-place annualized straight line base rent of $40.4 million, an in-place annualized cash base rent of $39.9 million. Our full year 2023 FFO guidance range is $1.50 to $1.55 per share, and our full year 2023 AFFO guidance range is $1.52 to $1.57 per share. Our 2023 guidance for acquisition activity is $100 million to $150 million of retail net lease properties, which is subject to reasonable market conditions, and we believe these acquisitions will occur at a similar or better blended yield to our 2022 full year acquisition cap rate. For dispositions, we're projecting to sell between $25 million and $50 million of properties at a similar blended yield or better to our 2022 full year disposition cap rate. And with that, I'll now pass it back to John for his closing remarks.

Thanks, Matt. During 2022, we delivered the second highest total shareholder return in our peer group. So, as we now fully transition into 2023, I'm excited about the opportunities we have in front of us and the support we've received from our shareholders. Our nimble size, evolving portfolio, de-risked balance sheet, and opportunistic approach to investing are all drivers of momentum to help us execute in 2023 and beyond. I want to thank our team for all their hard work, and at this time, we'll open it up for questions. Operator?

Instructions. Our first question or comment comes from the line of Gaurav Mehta from EF Hutton Group. Mr. Mehta, your line is open. Mr. Mehta, you may need to unmute your phone.

Yes, thanks. Good morning. I wanted to ask you on your comments about cap rate compression that you guys mentioned for investment-grade properties over the last few months. Can you maybe provide some more color on what you're seeing and what you're expecting for investment-grade asset cap rates?

Yes, so there's not a plethora of inventory out there. So, people that have good quality assets with good credits are holding onto their price. They're not breaking price. And so, because there's not a lot of inventory out there, your high net worth, your 1031 people are basically engaging at the price points that the sellers are willing to part with the assets. So, you are seeing that cap rates are definitely not expanding, and we just say they are kind of coming back down. It almost feels like following the tenure or something that cap rates have come back in. We are hopeful and optimistic that we'll get some really good buying opportunities, but so far, it’s a pretty strong market if you have the right credits.

Okay. Second question on leverage. Your pro forma debt to EBITDA at 6.6 times, do you expect that ratio to remain at current levels, or do you expect that to go up as you look to finance your acquisitions for 2023?

Yes, I think we'd like to keep it in that general range, but it's going to move around just as a function of the size of the company, right? It doesn't take much to move it up and down. So, we'll see how the stock performs, and we'll see where the buying opportunities are and where the cost of debt is, and we will respond and allocate capital accordingly.

Okay, thank you.

Thank you. Our next question or comment comes from the line of Rob Stevenson from Janney Corporation. Mr. Stevenson, your line is now open.

John, how are you thinking about sporting goods given the DICK’s acquisition? Is it just the credit on DICK’s, or is there something that you guys are seeing in the sporting goods vertical that has you excited about growth over the next few years?

Yes, we've always been very impressed with how well DICK’s performs in the stores that we own and the ones that we've looked at acquiring, and they're just such a strong operator that it seems like they're kind of the category killer. And so, it seems like their strong company performance really radiates from these locations. So, we're just really comfortable with that particular operator.

Okay. And how much more is there in the portfolio today that you'd want to sell, barring some out of the blue offer that's below what your cap rate expectation would wind up being for that particular asset?

Yes. I mean, we're seeing - basically we're getting inquiries on properties that we're not even in the market to sell. And obviously, we have our price point where we'll sell anything as long as we can - there's not a 1031 issue. And so, basically, we're seeing some really good attractive recycling candidates that we didn't really expect for this year. We didn't think we would sell them, but it looks like the pricing out there is better than we would've thought on the sell side. So, I expect to be somewhat active again here in the, call it more of the second quarter.

Okay. And then Matt, in your guidance, what type of spread are you assuming on cap rates between the acquisitions and the dispositions for the year?

Yes, I think it'll probably be consistent with what we did in 2022, so call it 100 basis points, plus or minus.

Okay. All right, guys, thanks. Appreciate the time.

Thank you. Our next question or comment comes from the line of RJ Milligan from Raymond James. Mr. Milligan, your line is now open.

Hey, good morning, guys. John, I just wanted to revisit your comments on sort of the cap rate compression for investment grade, and I'm just curious what terms you're seeing out there from lenders to lend on that type of investment?

Yes, it’s really high net worth, all cash. There's no lender involvement in where we're seeing the activity taking place right now. So, whether it's a smaller asset that it’s really a 1031 and there's no lender need, or it's high net worth, they're just very comfortable with the stability of the net lease, and there's no problem on pricing. They just want to place the capital in with particular credits and locations.

So, I guess per your comments, it's more a function of the lack of available product and that's sort of keeping cap rates relatively low. I guess the question is, if we were to see volume increase, would you expect cap rates to maybe expand a little bit?

Yes, I would definitely - you're absolutely right. It's because there's not inventory out there. If you had a forced seller out there of assets or a portfolio or a motivated seller, I think you would see cap rates expand a bit because that's what we're all waiting for, is opportunities to deploy at higher yields. And so, if people know that they have to sell, you're not going to basically be very aggressive. That's kind of what we're all waiting for. So, yes, if you suddenly saw a lot more activity happen, I think cap rates would expand a bit.

That's helpful. And then Matt, a question on the guidance for the outstanding share count. Obviously implies a little bit more equity through the year. How should we think about the cadence of that?

Yes, so with the pro forma leverage that Gaurav mentioned earlier and that's in our investor presentation, you can see we did a little bit of activity on the ATM to start the year before we went into blackout. So, a good chunk of that implied equity in the guidance has already been issued. The balance of that amount, I would expect to be more backend-weighted, and I think that would track transaction activity within the guidance as well.

And then, do you expect for the transaction activity, is there - do you expect a mismatch in terms of dispositions versus acquisitions, or do you think they'll be pretty equally timed throughout the year?

I think from John's comments, you can probably expect this to be a little bit more active on the disposition side in the second quarter, and there'd be good match funding from that perspective, but then the balance of the acquisitions is probably backend-weighted to the second half of the year.

Great. That's it for me, guys. Thank you.

Thank you. Our next question or comment comes from the line of Matthew Erdner from JonesTrading. Mr. Erdner, your line is now open.

Hey, guys. Matthew on for Jason. Are there any specific regions throughout the country where cap rates are expanding or kind of holding steady rather than compressing, or is it kind of compression all around?

Yes, I would say it's - I don't think there's a geographic area that is exhibiting something different than really the national new wave. I mean, I don't see a particular area that's expanding. Maybe some of the areas that are lower growth like as far as in Oregon or California may be people that just don't have a bigger buyer pull, but it's pretty steady all across.

Got you. And then following that up, last one for me, is there any specific industry that you guys are targeting, or is it just investment grade tenants that you're trying to recycle in?

It’s definitely, obviously investment grade kind of leads the way, but there's - it won't be really on the entertainment side, I guess. It'll be more your traditional staples of sort of assets, good consistent industries.

Awesome. Thank you, guys.

Thank you. Our next question or comment comes from the line of Michael Gorman from BTIG. Mr. Gorman, your line is now open.

Yes, thanks. Good morning. John, I was wondering if you could just spend a little bit more time talking about the acquisition market. I know you've talked about the investment grade cap rates. We've heard from some others that maybe there's also some differentiation within the specific sectors. Are you seeing that play out as well too, that there's more stratification between the sectors, even if they're both investment-grade tenants? And then I know you've talked previously before about seeing opportunities in shorter duration leases or assets with maybe some more near-term roll. Is that still out there as well, or is that starting to get priced out too?

Yes. I mean, that's getting - there hasn't been really any gap out in that kind of pricing for the shorter duration. It’s hanging in there. I wouldn't say it's - on the shorter duration, it's not compressing more. The one thing I will say is we've got to think about, on the inventory side, the merchant builders are not active - as active building new stores. So, you're not getting that inventory. I mean, first of all, the lender market for construction is tougher obviously. Rates don't make the performance look as good as they used to be. And then, obviously the construction costs are still elevated. They're not going up further, but they're not coming down like everyone had hoped. So, that kind of talks about the construction costs of these assets on a per square foot basis makes the older product with low rents very attractive as far as the basis you're able to buy these assets. And so, that's why you're seeing a lot of capital come into these properties, whether they're on the shorter duration, because the basis is so attractive.

Got it. That's helpful. And then Matt, maybe just quickly on your side, what are you seeing in terms of the debt markets or the optionality for you all? You don't have any near-term maturities, no exposure to floating rate debt, but if you did start to see a pickup in maybe investment pipeline opportunities, how are you thinking about the debt markets here? What are the attractive products that would be available to you, or in terms of, would you be able to put on swaps at this point to keep fixed rate, or would it most likely need to be variable rate on the line?

I think certainly there is an appetite for swaps in the bank market. And so, I think we could continue to sort of match fix acquisitions, whether that's on the line or a new term loan or some other piece of debt, we can maintain the fixed approach. On the interest rate side, in terms of capital available, there hasn't been as much runoff of people's balance sheets. And so, I think everybody in the real estate banking market is expecting some capacity to open up here into the second and third quarter, which should allow for longer duration term loans and better match funding with assets to pick up. It's been pretty tight to start the year. For us, we've historically accessed the term loan bank market. We're getting to a size where the private placement market is more attractive. So, I think both of those areas is where you could see us add incremental longer duration debt.

Okay, great. Thanks, guys.

Thank you. Our next question or comment comes from the line of Wes Golladay from Robert W. Baird. Mr. Golladay, your line is now open.

Hey good morning. Can you hear me?

Yep.

Okay, great. Hey, are you guys seeing any OP unit deals out there?

There's certainly - I would say there have been discussions, but whether it's not the right kind of purchase price for us. So, there's folks that would like to take OP units, but I think the bid ask on the asset is too wide.

Okay. And then, you obviously articulated some dispositions planned for this year, but the cost of capital has been improving. So, I'm curious, how do you balance incremental dispositions versus scaling the business in light of the 400 basis points of improved efficiency this year or 2022?

Yes. Well, on the disposition side, we’re using that capital to buy additional assets. So, it's not - we're not shrinking for sure. We're just taking advantage of upgrading the portfolio and accretive recycling. But other than that, we're definitely looking to grow beyond just the recycling. And so, we’re actively pursuing those opportunities.

Okay. And then Matt. I think the 6.6 times debt to EBITDA, at what point does this start to benefit you on having a lower spread on your floating rate debt? And then you did mention maybe doing some more fixed rate debt. Would there be a point where you are potentially over-swapped and maybe a long floating rate?

Yes, so with the 6.6 times, that's probably a 15 basis point benefit to our spread on the revolver and the term loans. Going forward, it resets every quarter. So, it'll take a little bit of time to get the benefit there once we head into the second quarter. But it certainly helps. On the longer duration debt, the swap that we did was a five-year swap. So, if and when we do a new term loan, it would effectively match up with that new term loan. Whether we go farther out on the swap rates to further hedge out, I think that'll depend on where interest rates are and what kind of duration is available on the debt origination side.

All right, great. Thanks, everyone.

Our next question or comment comes from the line of Mr. Craig Kucera from B. Riley. Your line is now open, sir.

Yes. Hey, good morning, guys. Most of mine have been answered, but I wanted to ask about your lease rollover. I think historically, you haven't had much in the portfolio, but you are starting to see a pickup here a little bit in ‘23 and certainly in ’24. Are you having any discussions at this point on extensions? And I just would be curious about any thoughts you have on lease expirations over the next year or two?

Yes. Thanks, Craig. We have had extension discussions. We're actually seeing some tenants with expirations a couple of years away try to come in early to get something for an early extension. And a lot of those locations were comfortable basically waiting till the renewal. But if there's an opportunity to do something with the tenants on multiple assets, we're certainly open to those discussions. So, yes, we're obviously in intended discussions about renewals and early renewals.

Okay, great. That's all for me. Thank you.

Thank you. I'm sure no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Albright for any closing remarks.

Thank you very much for attending the call, and I look forward to talking to you after.

Thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by.