Alpine Income Property Trust (PINE) risk factors, FY2025 10-K

Other

1. 01An investment in our securities involves a high degree of risk. The following list of risk factors is not exhaustive and should be read together with the more detailed risk factors contained belowNew

Risks Related to Our Income Properties Segment

1. 02We are subject to risks related to the ownership of commercial real estate that could affect the performance and value of our properties
2. 03Adverse changes in U.S., global and local regions or markets that impact our tenants’ businesses may materially and adversely affect us generally and the ability of our tenants to make rental payments to us pursuant to our leases
3. 04Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our performanceNew
4. 05Our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us
5. 06Our assessment that certain of our tenants’ businesses are insulated from e-commerce pressure may prove to be incorrect, and changes in macroeconomic trends may adversely affect our tenants, either of which could impair our tenants’ ability to make rental payments to us and thereby materially and adversely affect us
6. 07Properties occupied by a single tenant pursuant to a single lease subject us to significant risk of tenant default
7. 08We may experience a decline in the fair value of our real estate assets which could result in impairments and would impact our financial condition and results of operations
8. 09Our portfolio has geographic market concentrations that make us susceptible to adverse developments in those geographic markets
9. 10We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us
10. 11Certain of our tenants are not rated by a recognized credit rating agency or do not have an investment grade rating from such an agency. Leases with unrated or non-investment grade rated tenants may be subject to a greater risk of default
11. 12A decrease in demand for retail space may materially and adversely affect us
12. 13We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all
13. 14Certain provisions of our leases may be unenforceable
14. 15The bankruptcy or insolvency of any of our tenants could result in the termination of such tenant’s lease and material losses to us
15. 16We may not acquire the properties that we evaluate in our pipeline
16. 17As we continue to acquire properties, we may decrease or fail to increase the diversity of our portfolio20% rewritten
17. 18The vacancy of one or more of our properties could result in us having to incur significant capital expenditures to re-tenant the space
18. 19We may be unable to identify and complete suitable property acquisitions or developments, which may impede our growth, and our future acquisitions and developments may not yield the returns we expect
19. 20We may be unable to complete acquisitions of properties owned by CTO that are covered by the ROFO Agreement, and any completed acquisitions of such properties may not yield the returns we expect
20. 21We face significant competition for tenants, which may adversely impact the occupancy levels of our portfolio or prevent increases of the rental rates of our properties
21. 22Inflation may materially and adversely affect us and our tenants
22. 23The redevelopment or renovation of our properties may cause us to experience unexpected costs and have other risks that could materially and adversely affect us
23. 24Our real estate investments are generally illiquid, which could significantly affect our ability to respond to market changes or adverse changes relating to our tenants or in the performance of our properties
24. 25We may not be able to dispose of properties we target for sale to recycle our capital
25. 26The development of new projects and/or properties may cause us to experience unexpected costs and have other risks that could materially and adversely affect us
26. 27The success of our activities related to new project development in which we will retain an ownership interest is partly dependent on the availability of suitable undeveloped land at acceptable prices

Risks Related to Our Commercial Loans and Investments Segment

1. 28A part of our investment strategy is focused on investing in commercial loans and investments which may involve credit risk
2. 29Our commercial loans and investments segment is also generally exposed to risks associated with real estate investments
3. 30Our origination or acquisition of construction loans exposes us to an increased risk of loss
4. 31Our investments in construction loans require us to make estimates about the fair value of land improvements that may be challenged by the Internal Revenue Service (“IRS”)
5. 32We invest in fixed-rate loan investments, and an increase in interest rates may adversely affect the value of these investments, which could adversely impact our financial condition, results of operations and cash flows
6. 33The commercial loans or similar financings we have acquired and may acquire in the future that are secured by real estate typically depend on the ability of the property owner to generate income from operating the property. Failure to do so may result in delinquency and/or foreclosure
7. 34We may suffer losses when a borrower defaults on a loan and the value of the underlying collateral is less than the amount due
8. 35We could fail to continue to qualify as a REIT if the IRS successfully challenges our treatment of any mezzanine loans in which we invest
9. 36We are subject to risks associated with commercial real estate loan participations

Risks Related to Certain Events, Environmental Matters and Climate Change

1. 37Natural disasters, terrorist attacks, other acts of violence or war or other unexpected events could materially and adversely affect us
2. 38Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us
3. 39The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us
4. 40Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediation
5. 41Our operations and financial condition may be adversely affected by climate change, including possible changes in weather patterns, weather-related events, government policy, laws, regulations and economic conditions

Risks Related to Other Aspects of our Operation and as a Public Company

1. 42Our senior management team is required to operate two publicly traded companies, CTO and our company, which could place a significant strain on our senior management team and the management systems, infrastructure and other resources of CTO on which we rely
2. 43If there are deficiencies in our disclosure controls and procedures or internal control over financial reporting, we may be unable to accurately present our financial statements, which could materially and adversely affect us
3. 44Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unanticipated expenditures that materially and adversely affect us
4. 45We have in the past and may in the future choose to acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets

Risks Related to Our Relationship with CTO and Our Manager and the Management Agreement

1. 46We have no employees and are entirely dependent upon our Manager for all the services we require, and we cannot assure you that our Manager will allocate the resources necessary to meet our business objectives
2. 47CTO may be unable to obtain or retain the executive officers and other personnel that it provides to us through our Manager
3. 48We pay substantial fees and expenses to our Manager. These payments increase the risk that you will not earn a profit on your investment
4. 49The base management fee payable to our Manager pursuant to the Management Agreement is payable regardless of the performance of our portfolio, which may reduce our Manager’s incentive to devote the time and effort to seeking profitable investment opportunities for us
5. 50The incentive fee payable to our Manager pursuant to the Management Agreement may cause our Manager to select investments in more risky assets to increase its incentive compensation
6. 51There are conflicts of interest in our relationships with our Manager, which could result in outcomes that are not in our best interests
7. 52Our Manager’s failure to identify and acquire properties that meet our investment criteria or perform its responsibilities under the Management Agreement could materially and adversely affect our business and our ability to make distributions to our stockholders
8. 53Our Manager’s liability is limited under the Management Agreement, and we have agreed to indemnify our Manager against certain liabilities. As a result, we could experience unfavorable operating results or incur losses for which our Manager would not be liable
9. 54with and pursuant to the Management Agreement, except those resulting from acts constituting gross negligence, willful misconduct, bad faith or reckless disregard of our Manager’s duties under the Management Agreement
10. 55Termination of the Management Agreement could be difficult and costly, including as a result of payment of termination fees to our Manager, and may cause us to be unable to execute our business plan, which could materially and adversely affect us
11. 56If our Manager ceases to be our manager pursuant to the Management Agreement, counterparties to our agreements may cease doing business with us
12. 57The Management Agreement with our Manager and the ROFO Agreement with CTO were not negotiated on an arm’s-length basis and may not be as favorable to us as if they had been negotiated with unaffiliated third parties

Risks Related to Our Financing Activities

1. 58Our growth depends on external sources of capital, including debt financings, that are outside of our control and may not be available to us on commercially reasonable terms or at all
2. 59Our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future. As a result, we may become highly leveraged in the future, which could materially and adversely affect us
3. 60The agreements governing our indebtedness place restrictions on us and our subsidiaries, reducing our operational flexibility and creating risks associated with default and noncompliance
4. 61Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in any property subject to mortgage debt
5. 62Increases in interest rates have and will likely continue to increase our interest costs on our variable rate debt and could adversely impact our ability to refinance existing debt or sell assets

Risks Related to Our Organization and Structure

1. 63We are a holding company with no direct operations, and we rely on funds received from the Operating Partnership to pay our obligations and make distributions to our stockholders
2. 64Certain provisions of Maryland law could inhibit changes in control of our company
3. 65Certain provisions in the partnership agreement of the Operating Partnership may delay, defer or prevent unsolicited acquisitions of us
4. 66Our charter contains stock ownership limits, which may delay, defer or prevent a change of control
5. 67The Board may change our strategies, policies or procedures without stockholder consent, which may subject us to different and more significant risks in the future
6. 68We may have assumed unknown liabilities in connection with the Formation Transactions, which, if significant, could materially and adversely affect us
7. 69Our rights and the rights of our stockholders to take action against our directors and executive officers are limited, which could limit your recourse in the event of actions not in your best interest
8. 70Conflicts of interest exist or could arise in the future between the interests of our stockholders and the interests of holders of Operating Partnership units, which may impede business decisions that could benefit our stockholders
9. 71We could increase or decrease the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval, which could prevent a change in our control and negatively affect the market price of our securities
10. 72The Operating Partnership has in the past and may in the future issue additional OP Units without the consent of our stockholders, which could have a dilutive effect on our stockholders
11. 73We are a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our securities less attractive to investors38% rewritten

Risks Related to Our Qualification and Operation as a REIT

1. 74Failure to remain qualified as a REIT would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to our stockholders
2. 75Even if we remain qualified as a REIT, we may face other tax liabilities that could reduce our cash flows and negatively impact our results of operations and financial condition
3. 76Failure to make required distributions would subject us to U.S. federal corporate income tax
4. 77Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments
5. 78Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities
6. 79Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a TRS
7. 80The prohibited transactions tax may limit our ability to dispose of our properties
8. 81We may pay taxable dividends in our stock and cash, in which case stockholders may sell shares of our common stock to pay tax on such dividends, placing downward pressure on the market price of our stock22% rewritten
9. 82The ability of the Board to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders
10. 83Any ownership of a TRS we may form in the future will be subject to limitations and our transactions with a TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms
11. 84The stock ownership restrictions of the Code for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in our capital stock and restrict our business combination opportunities
12. 85Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
13. 86We may be subject to adverse legislative or regulatory tax changes, in each instance with potentially retroactive effect, that could reduce the market price of our securities
14. 87If the Operating Partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences

Risks Related to Our Securities

1. 88The market values of our securities are subject to various factors that may cause significant fluctuations or volatility
2. 89There can be no assurance that we will be able to make or maintain cash distributions, and certain agreements relating to our indebtedness may, under certain circumstances, limit or eliminate our ability to make distributions to our stockholders
3. 90The market prices of our securities could be adversely affected by our level of cash distributionsNew
4. 91Increases in market interest rates may result in a decline in the market prices of our securities24% rewritten
5. 92Sales of substantial amounts of our common stock in the public markets or the perception that they might occur, could reduce the price of our common stock and may dilute the voting power of our then-existing common stockholders and such common stockholders’ ownership interest in us
6. 93Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations55% rewritten
7. 94Artificial intelligence and other machine learning techniques could increase competitive, operational, legal and regulatory risks to our business in ways that we cannot predictNew
8. 95We may become subject to litigation, which could materially and adversely affect us
9. 96If we fail to maintain effective disclosure controls and procedures, we may not be able to meet applicable reporting requirements, which could materially and adversely affect us
10. 97Changes in accounting standards may materially and adversely affect us
11. 98We are subject to risks related to corporate social responsibility
12. 99Evolving investor-related sentiment related to ESG issues could adversely affect our businessNew