PINE

Business Context and Reporting Period

Company: Alpine Income Property Trust, Inc. (PINE)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: PINE is an externally managed Real Estate Investment Trust (REIT) focused on owning and operating a portfolio of commercial net lease properties and originating commercial loans. As of December 31, 2025, the portfolio consisted of 127 properties across 32 states with 99.5% occupancy and a weighted average remaining lease term of 8.4 years. The company is managed by Alpine Income Property Manager, LLC, a subsidiary of CTO Realty Growth, Inc.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 15.9% to $60.5 million, driven primarily by a 97.0% increase in interest income from commercial loans ($11.4 million vs. $5.8 million) and a 5.8% increase in lease income.
• Net Loss: The company reported a net loss of $2.9 million in 2025 compared to net income of $2.3 million in 2024. This decline was primarily due to a $5.7 million increase in the provision for impairment and a $4.3 million increase in interest expense.
• Impairment Charges: The provision for impairment rose significantly to $7.4 million (from $1.7 million in 2024). This included $6.6 million related to income properties (including losses on Walgreens and Party City properties) and $0.8 million related to commercial loans (CECL reserve).
• Debt Expansion: Long-term debt increased by approximately $76 million to $378 million to fund acquisitions and loan originations. Interest expense rose 35.5% to $16.3 million due to higher debt balances and interest rates.
• Portfolio Activity: The company acquired 13 properties for $100.6 million and sold 20 properties for $72.8 million. The commercial loan portfolio grew to a carrying value of $167.6 million.

Guidance, Outlook, and Risks

Capital Markets & Liquidity:

• Equity: The company raised $48.1 million in net proceeds from a Series A Preferred Stock offering and $10.4 million from its common stock ATM program. As of year-end, $79.9 million remained available under the common ATM program and $32.9 million under the preferred ATM program.
• Debt: The company has a $250 million credit facility with $40.6 million available capacity. On February 4, 2026, the company entered into a new Amended and Restated Credit Agreement providing a $250 million revolving facility and two new term loans ($100 million each maturing in 2029 and 2031), replacing prior facilities.

Management Commentary:

• Management continues to focus on acquiring net leased properties and commercial loans to increase the portfolio of income-producing assets.
• The company believes it has sufficient liquidity to fund operations and debt service for the next 12 months.

Risks and Contingencies:

• Tenant Concentration: Dick's Sporting Goods and Lowe's accounted for 11% and 10% of lease income, respectively, in 2025. Walgreens was a significant tenant in prior years.
• Impairment Risk: Continued volatility in the retail sector and tenant bankruptcies (e.g., Party City, convenience store tenants) have led to recurring impairment charges.
• Interest Rate Risk: Rising interest rates have increased borrowing costs on variable-rate debt, though the company utilizes interest rate swaps to hedge portions of its exposure.
• External Management: The company relies entirely on CTO Realty Growth, Inc. for management, creating potential conflicts of interest and dependency risks.

Key Facts for Investor Verification

• Impairment Drivers: Verify the specific status of the properties contributing to the $6.6 million impairment charge (Walgreens, Party City, convenience stores) and the likelihood of further write-downs.
• Debt Refinancing: Confirm the terms and interest rates of the new credit facility entered into on February 4, 2026, and its impact on future interest expense.
• Commercial Loan Yield: Assess the sustainability of the 12.4% weighted average initial cash yield on new commercial loan originations and the associated credit risk (CECL reserves).
• Preferred Stock Obligations: Note the issuance of 8.00% Series A Preferred Stock, which ranks senior to common stock for dividends and liquidation, and the associated $552,000 in distributions for 2025.
• Occupancy Stability: Monitor the 99.5% occupancy rate and the weighted average lease term of 8.4 years to ensure lease renewals are occurring without significant rent concessions.