Form S-11/A

Raymond James

B. Riley FBR

BMO Capital Markets

Janney Montgomery Scott

D.A. Davidson & Co.

S-11/A 1 d793798ds11a.htm FORM S-11/A Form S-11/A

As filed with the Securities and Exchange Commission on November 19, 2019

Registration Statement No. 333-234304

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

Form S-11

FOR REGISTRATION

UNDER THE SECURITIES ACT OF 1933

OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

Alpine Income Property Trust, Inc.

(Exact name of registrant as specified in its governing instruments)

1140 N. Williamson Blvd., Suite 140

Daytona Beach, Florida 32114

Tel: (386) 274-2202

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Daniel E. Smith, Esq.

Senior Vice President, General Counsel and Corporate Secretary

Alpine Income Property Trust, Inc.

1140 N. Williamson Blvd., Suite 140

Daytona Beach, Florida 32114

Tel: (386) 274-2202

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David S. Freed, Esq.
Vinson & Elkins LLP

666 Fifth Avenue

New York, New York 10103

Tel: (212) 237-0000

Fax: (212) 237-0100

David C. Wright, Esq.

James V. Davidson, Esq.

Hunton Andrews Kurth LLP

Riverfront Plaza, East Tower

951 E. Byrd Street

Richmond, Virginia 23219

Tel: (804) 788-8200

Fax: (804) 788-8218

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller reporting company ☒		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION,

PRELIMINARY PROSPECTUS DATED NOVEMBER 19, 2019

PROSPECTUS

7,500,000 Shares

LOGO

Common Stock

Alpine Income Property Trust, Inc. is a newly organized real estate company that owns and operates a high quality portfolio of single-tenant commercial properties that are primarily net leased on a long-term basis and located primarily in major metropolitan statistical areas and in growth markets in the United States. We are externally managed and advised by Alpine Income Property Manager, LLC, a wholly-owned subsidiary of Consolidated-Tomoka Land Co., or CTO, a diversified real estate operating company that is publicly traded on the NYSE American under the symbol “CTO.”

This is our initial public offering. No public market currently exists for our common stock.

We are selling all of the shares of common stock offered by this prospectus. We expect the public offering price to be between $19.00 and $21.00 per share. We have applied to list our common stock on the New York Stock Exchange under the symbol “PINE.”

Concurrently with the closing of this offering, CTO will purchase from us $7.5 million in shares of our common stock in a separate private placement. CTO will purchase these shares at a price per share equal to the public offering price per share in this offering, without payment of any placement fee or underwriting discount.

We intend to elect to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with our short taxable year ending December 31, 2019. We believe that, commencing with such taxable year, we will be organized and will operate in such a manner as to qualify for taxation as a REIT under the U.S. federal income tax laws. To assist us in qualifying as a REIT, stockholders generally will be restricted from owning more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock. In addition, our charter contains various other restrictions on the ownership and transfer of our common stock. See “Description of Capital Stock—Restrictions on Ownership and Transfer.”

We are an “emerging growth company” under U.S. federal securities laws and will be subject to reduced public company reporting requirements. You should consider the risks described in “Risk Factors” beginning on page 25 of this prospectus for risks relevant to an investment in our common stock.


	Per Share	Total

Public offering price	$	$

Underwriting discount (1)	$	$

Proceeds, to us, before expenses	$	$

(1)	Includes a structuring fee payable to Raymond James & Associates, Inc. equal to 0.5% of the gross proceeds of this offering. Excludes certain other compensation payable to the underwriters. See “Underwriting” for a description of the compensation payable to the underwriters.

The underwriters may purchase up to an additional 1,125,000 shares of our common stock from us, at the public offering price less the underwriting discount, within 30 days after the date of this prospectus.

Neither the Securities and Exchange Commission, or the SEC, nor any state or non-U.S. securities commission or authority has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares on or about November , 2019.

The date of this prospectus is November , 2019.

TABLE OF CONTENTS



PROSPECTUS SUMMARY			1

RISK FACTORS			25

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			65

USE OF PROCEEDS			67

DISTRIBUTION POLICY			68

CAPITALIZATION			71

DILUTION			72

SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA			74

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			77

MARKET OPPORTUNITY			88

BUSINESS AND PROPERTIES			96

MANAGEMENT			119

OUR MANAGER AND THE MANAGEMENT AGREEMENT			131

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			142

STRUCTURE AND FORMATION OF OUR COMPANY			147

POLICIES WITH RESPECT TO CERTAIN ACTIVITIES			152

DESCRIPTION OF THE PARTNERSHIP AGREEMENT OF ALPINE INCOME PROPERTY OP, LP			158

PRINCIPAL STOCKHOLDERS			167

DESCRIPTION OF CAPITAL STOCK			169

CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS			174

SHARES ELIGIBLE FOR FUTURE SALE			182

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			185

ERISA CONSIDERATIONS			216

UNDERWRITING			219

LEGAL MATTERS			226

EXPERTS			226

WHERE YOU CAN FIND MORE INFORMATION			226

INDEX TO FINANCIAL STATEMENTS			F-1

You should rely only on the information contained in this prospectus or any free writing prospectus prepared by us. We have not, and the underwriters have not, authorized any other person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the cover of this prospectus. Our business, financial condition, liquidity, results of operations and prospects may have changed since that date.

Market Data

We use market data, demographic data, industry forecasts and industry projections throughout this prospectus. Unless otherwise indicated, we derived such information from the market study prepared for us by Rosen Consulting Group, or RCG, a nationally-recognized real estate consulting firm. Such information is included in this prospectus in reliance on RCG’s authority as an expert on such matters. We have paid RCG a fee of $62,000 for such services. In addition, we have obtained certain market and industry data from publicly available industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The industry forecasts and projections are based on historical market data and the preparers’ experience in the industry, and there is no assurance that any of the projected amounts will be achieved. We believe that the market and industry research others have performed are reliable, but we have not independently verified this information.

Certain Terms Used in This Prospectus

The following terms are used throughout this prospectus and, unless the context otherwise requires or indicates, these terms are defined as follows:

•

“Alpine Income Property Trust Predecessor” or “our Predecessor” means a combination of entities under common control that have been “carved out” from CTO’s consolidated financial statements;

•

“annualized base rent” means annualized contractually specified cash base rent in effect on September 30, 2019 for the leases for our properties in our initial portfolio (including those accounted for as direct financing leases);

•

“Code” means the Internal Revenue Code of 1986, as amended;

•

“concurrent CTO private placement” means the sale by us to CTO, in a separate private placement that will close concurrently with the closing of this offering, of $7.5 million in shares of our common stock at a price per share equal to the public offering price per share in this offering, without payment of any placement fee or underwriting discount;

•

“CTO” means Consolidated-Tomoka Land Co. (NYSE American: CTO), a Florida corporation that is a publicly traded, diversified real estate operating company and the sole member of our Manager;

•

“Equity Incentive Plans” means, collectively, the Individual Equity Incentive Plan and the Manager Equity Incentive Plan;

•

“formation transactions” means the transactions described under “Structure and Formation of Our Company” that we have consummated or intend to consummate prior to or concurrently with the closing of this offering and the concurrent CTO private placement, including the acquisition of our initial portfolio;

•

“GAAP” means accounting principles generally accepted in the United States of America;

•

“Indigo” means Indigo Group Ltd., a Florida limited partnership and an indirect wholly-owned subsidiary of CTO;

•

“Individual Equity Incentive Plan” means the Alpine Income Property Trust, Inc. 2019 Individual Equity Incentive Plan;

•

“initial portfolio” means the portfolio of 20 single-tenant, primarily net leased retail and office properties occupied by 16 tenants across 15 markets in ten states that we will acquire from CTO as part of the formation transactions, as described in “Prospectus Summary—Our Initial Portfolio” and “Business and Properties—Our Initial Portfolio”;

•

“Manager” means Alpine Income Property Manager, LLC, a Delaware limited liability company, our external manager and a wholly-owned subsidiary of CTO;

•

“Manager Equity Incentive Plan” means the Alpine Income Property Trust, Inc. 2019 Manager Equity Incentive Plan;

•

“occupancy” or a specified percentage of our portfolio that is “occupied” means the quotient of (1) the total square feet of our properties minus the square feet of our properties that are vacant and from which we are not receiving any rental payment and (2) the total square feet of our properties as of a specified date;

•

“OP units” means common units of limited partnership interest in our Operating Partnership, which are redeemable for cash or, at our election, shares of our common stock on a one-for-one basis, beginning one year after the issuance of such units;

•

“Operating Partnership” means Alpine Income Property OP, LP, a Delaware limited partnership, through which we will hold substantially all of our assets and conduct our operations;

•

“REIT” means a real estate investment trust within the meaning of Sections 856 through 860 of the Code;

•

“revolving credit facility” means the $100 million unsecured revolving credit facility we expect to enter into concurrently with the completion of this offering; and

•

“we,” “our,” “us” and “our company” mean Alpine Income Property Trust, Inc., a Maryland corporation, together with its consolidated subsidiaries, including our Operating Partnership and Alpine Income Property GP, LLC, the sole general partner of our Operating Partnership.

iii

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including the section entitled “Risk Factors,” as well as the financial statements and related notes included elsewhere in this prospectus, before making an investment decision.

Unless otherwise indicated, the information contained in this prospectus is as of September 30, 2019 and assumes that (i) the underwriters’ option to purchase up to an additional 1,125,000 shares of our common stock is not exercised, (ii) the shares of our common stock to be sold in this offering and the concurrent CTO private placement are sold at $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus and (iii) the initial value of an OP unit is equal to the mid-point of the price range set forth on the front cover of this prospectus. In addition, unless otherwise indicated, the information in this prospectus assumes that this offering, the concurrent CTO private placement and the formation transactions have been completed on the terms and timing we expect and as described herein.

Our Company

We are a newly organized real estate company that owns and operates a high-quality portfolio of single-tenant commercial properties. All of the properties in our initial portfolio are leased on a long-term basis and located primarily in or in close proximity to major metropolitan statistical areas, or MSAs, and in growth markets and other markets in the United States with favorable economic and demographic conditions. Eighteen of the 20 properties in our initial portfolio, representing approximately 82% of our initial portfolio’s annualized base rent (as of September 30, 2019), are leased on a triple-net basis. Our properties are primarily leased to industry leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce. Our initial portfolio consists of 20 single-tenant, primarily net leased retail and office properties located in 15 markets in ten states, which we acquired from CTO in our formation transactions utilizing approximately $125.9 million of proceeds from this offering and the concurrent CTO private placement and 1,223,854 OP units that have an initial value of approximately $24.5 million based on the assumed public offering price of $20.00, which is the mid-point of the price range set forth on the front cover of this prospectus. For two of our properties in our initial portfolio, we are the lessor in a long-term ground lease to the tenant. We are externally managed by our Manager, a wholly-owned subsidiary of CTO. Concurrently with the closing of this offering, CTO will invest $7.5 million in exchange for shares of our common stock at a price per share equal to the public offering price per share in this offering. Upon completion of this offering, the concurrent CTO private placement and the formation transactions, CTO will own approximately 17.6% of our outstanding common stock (assuming the OP units to be issued to CTO in the formation transactions are exchanged for shares of our common stock on a one-for-one basis).

Our initial portfolio is comprised of single-tenant retail and office properties primarily located in or in close proximity to major MSAs, growth markets and other markets in the United States with favorable economic and demographic conditions and leased to tenants with favorable credit profiles or performance attributes. All of the properties in our initial portfolio are subject to long-term, primarily triple-net leases, which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures. We intend to elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our short taxable year ending

December 31, 2019. We believe that, commencing with such taxable year, we will be organized and will operate in such a manner as to qualify for taxation as a REIT under the U.S. federal income tax laws.

Our objective is to maximize cash flow and value per share by generating stable and growing cash flows and attractive risk-adjusted returns through owning, operating and growing a diversified portfolio of high-quality single-tenant, net leased commercial properties with strong long-term real estate fundamentals. The 20 properties in our initial portfolio are 100% occupied and represent approximately 817,000 of gross rentable square feet with leases that have a weighted average lease term of approximately 8.2 years (based on annualized base rent as of September 30, 2019). None of our leases expire prior to January 31, 2024. Our initial portfolio is representative of our investment thesis, which consists of one or more of the following core investment criteria:

•

Attractive Locations. The 20 properties in our initial portfolio represent approximately 817,000 gross rentable square feet, are 100% occupied and are primarily located in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. Approximately 82% of our initial portfolio’s annualized base rent as of September 30, 2019 was derived from properties (i) located in MSAs with populations greater than one million and unemployment rates less than 3.6% and (ii) where the mean household income within a three-mile radius of the property is greater than $88,000.

•

Creditworthy Tenants. Approximately 38.2% of our initial portfolio’s annualized base rent as of September 30, 2019 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency. Our largest tenant, Wells Fargo N.A., has an ‘A+’ credit rating from S&P Global Ratings and contributed approximately 25.0% of our initial portfolio’s annualized base rent as of September 30, 2019.

•

Geographically Diversified. Our initial portfolio is occupied by 16 tenants across 15 markets in ten states. Our largest property, as measured by annualized base rent, is located in the Portland, Oregon MSA.

•

100% Occupied with Long Duration Leases. Our initial portfolio is 100% leased and occupied. The leases in our initial portfolio have a weighted average remaining lease term of approximately 8.2 years (based on annualized base rent as of September 30, 2019), with none of the leases expiring prior to January 31, 2024.

•

Contractual Rent Growth. Approximately 54.2% of the leases in our initial portfolio (based on annualized base rent as of September 30, 2019) provide for increases in contractual base rent during the current term. In addition, approximately 84% (based on annualized base rent as of September 30, 2019) of the leases in our initial portfolio allow for increases in base rent during the lease extension periods.

We will employ a disciplined growth strategy, which emphasizes investing in high quality properties located in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. We intend to lease our properties primarily to industry-leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce.

We believe that the single-tenant retail and office properties we own and intend to acquire will provide our stockholders with investment diversification and can deliver strong risk-adjusted returns. We expect the majority of our net leased properties will be single-tenant retail properties, with the remainder comprised of single-tenant office properties that are critical to the tenant’s overall business. We believe the risk-adjusted returns for select single-tenant office properties are compelling and offer attractive investment yields, rental rates at or below prevailing market rental rates and an investment basis below replacement cost. Based on our senior management team’s experience, we believe single-tenant office properties often have less buyer competition. In addition, we believe that long-term property tenants who have consistently invested their own capital into their leased premises are less likely to vacate the property and the risk of significant capital investment to re-lease the property is reduced. We believe that certain of the single-tenant office properties in our initial portfolio provide the opportunity for increased rents to higher market rent levels at the end of their lease terms.

Our Competitive Advantages

We believe our strategy and structure provide us with competitive advantages as a newly formed REIT focused on single-tenant, net leased properties.

Positioned for Growth

We believe our initial size and debt-free balance sheet position us well for growth. As a smaller company relative to our publicly-traded net lease REIT peers, we will focus our acquisition activity on transactions that are often below the deal size that many of our competitors pursue, and even smaller accretive transactions can have a meaningful impact on our net asset value and cash flows. Although we expect to evaluate a relatively large volume of potential investment transactions, we believe our size will allow us to be selective, ensuring that our acquisitions align with our investment objectives, particularly with regard to our initial investment yield, target markets and real estate and tenant quality. Our initial debt-free balance sheet, any unallocated cash from this offering and the concurrent CTO private placement and access to growth capital through an undrawn $100 million unsecured revolving credit facility that we anticipate obtaining concurrently with the completion of this offering will provide significant initial capital for our growth.

Experienced Management

The parent company of our Manager, CTO, is a 109-year old real estate company that has been publicly-traded for 50 years and is currently listed on the NYSE American. CTO has paid an annual dividend since 1976. Our senior management team, which is also the senior management team of CTO, has substantial experience investing in, owning, managing, developing and monetizing commercial real estate properties across the United States, particularly single-tenant, net leased properties. Our senior management team has an extensive network for sourcing investments, including relationships with national and regional brokers, other REITs, corporate tenants, banks and other financial services firms, private equity funds and leading commercial real estate investors. Our senior management team is led by John P. Albright, President and Chief Executive Officer of our company and CTO. Additionally, our senior management team includes: Mark E. Patten, Senior Vice President, Chief Financial Officer and Treasurer of our company and CTO; Steven R. Greathouse, Senior Vice President, Investments of our company and CTO; and Daniel E. Smith, Senior Vice President, General Counsel and Corporate Secretary of our company and CTO. Messrs. Albright, Patten and Greathouse have worked together at CTO for over seven years, and our senior management team has an average of more than 19 years of experience with

public real estate companies, including REITs, as well as significant experience in leadership positions at other public companies, a Big Four public accounting firm and private real estate companies. Our senior management team is experienced in all areas of managing a public company, including regulatory reporting, capital markets activity, investor relations and communication, compliance, stock exchange matters and cost management. Our senior management team has combined experience of over 100 years, almost entirely in real estate.

During their tenure at CTO, our senior management team has executed approximately $560.0 million in commercial real estate transactions, primarily acquisitions of single-tenant, net leased properties, creating a high-quality income property portfolio that we believe compares favorably to our publicly-traded net lease REIT peers. The properties in our initial portfolio are located in markets where the average population and average household income, within a three-mile radius, are substantially higher than those of our publicly-traded net lease REIT peers. In addition, since 2012, our senior management team has disposed of more than $220 million of net leased properties generating more than $41.3 million in pre-tax gains for CTO’s shareholders. Also, while at CTO, our senior management team has sold over 5,400 acres of undeveloped land, generating proceeds of approximately $165 million, to a variety of developers and operators, including Tanger Outlets, Trader Joes, North American Development Group, or NADG, Minto Communities, or Minto, and Sam’s Club. Additionally, during October 2019, CTO completed the sale of a controlling interest in a venture that holds CTO’s remaining 5,300 acres of land for total proceeds of $97 million.

Our Initial Portfolio

The table below presents an overview of the properties in our initial portfolio as of September 30, 2019, unless otherwise indicated.

Property
Type

Tenant

S&P
Credit
Rating
(1)

Property Location

Rentable
Square
Feet

Lease
Expiration
Date

Remaining
Term
(Years)

Tenant
Extension
Options
(Number
x Years)

Contractual
Rent
Escalations

Annualized
Base Rent(2)

Office

Wells Fargo

A+

Portland, OR

211,863

12/31/25

6.3

3x5

3,124,979

Office

Hilton Grand
Vacations

BB+

Orlando, FL

102,019

11/30/26

7.2

2x5

Yes

1,658,143

Retail

LA Fitness

B+

Brandon, FL

45,000

4/26/32

12.6

3x5

Yes

851,688

Retail

At Home

B+

Raleigh, NC

116,334

9/14/29

10.0

4x5

Yes

658,351

Retail

Century Theater

Reno, NV

52,474

11/30/24

5.2

3x5

644,000

Retail

Container Store

Phoenix, AZ

23,329

2/28/30

10.4

2x5

Yes

630,315

Office

Hilton Grand
Vacations

BB+

Orlando, FL

31,895

11/30/26

7.2

2x5

Yes

621,953

Retail

Live Nation
Entertainment, Inc.

BB-

East Troy, WI

—

⁽³⁾

3/31/30

10.5

N/A

Yes

546,542

Retail

Hobby Lobby

N/A

Winston-Salem, NC

55,000

3/31/30

10.5

3x5

Yes

522,500

Retail

Dick’s Sporting Goods

N/A

McDonough, GA

46,315

1/31/24

4.3

4x5

472,500

Retail

Jo-Ann Fabric

B-

Saugus, MA

22,500

1/31/29

9.3

4x5

Yes

450,000

Retail

Walgreens

BBB

Birmingham, AL

14,516

3/31/29

9.5

N/A

364,300

Retail

Walgreens

BBB

Alpharetta, GA

15,120

10/31/25

6.1

N/A

362,880

Retail

Best Buy

BBB

McDonough, GA

30,038

3/31/26

6.5

4x5

337,500

Retail

Outback

Charlottesville, VA

7,216

9/30/31

12.0

4x5

Yes

287,923

Retail

Walgreens

BBB

Albany, GA

14,770

1/31/33

13.3

N/A

258,000

Retail

Outback

Charlotte, NC

6,297

9/30/31

12.0

4x5

Yes

206,027

Retail

Cheddars⁽⁴⁾

BBB

Jacksonville, FL

8,146

9/30/27

8.0

4x5

Yes

175,000

Retail

Scrubbles⁽⁴⁾

N/A

Jacksonville, FL

4,512

10/31/37

18.1

4x5

Yes

174,400

Retail

Family Dollar

BBB-

Lynn, MA

9,228

3/31/24

4.5

7x5

160,000

Total / Wtd. Avg.

816,572

8.2

12,507,001

(1)	Tenant, or tenant parent, rated entity.

(2)	Annualized cash base rental income in place as of September 30, 2019.

(3)	The Alpine Valley Music Theatre, leased to Live Nation Entertainment, Inc., is an entertainment venue consisting of a two-sided, open-air, 7,500-seat pavilion; an outdoor amphitheater with capacity for 37,000; and over 150 acres of green space.

(4)	We are the lessor in a ground lease with the tenant. Rentable square feet represents improvements on the property that revert to us at the expiration of the lease.

Acquisitions Under Evaluation

We anticipate that we will have the opportunity to grow our portfolio as a result of both third-party acquisition opportunities that our senior management team is currently evaluating and our exclusive right of first offer access to CTO’s remaining portfolio of single-tenant, net leased properties and future single-tenant, net leased properties pursuant to an exclusivity and ROFO agreement with CTO, although we do not view any such acquisition opportunities as probable at this time.

Third-Party Acquisitions Under Evaluation

As of November 1, 2019, our senior management team is evaluating on our behalf acquisition opportunities of single-tenant, net leased properties from third-parties with an estimated aggregate purchase price of approximately $337.2 million. We refer to these acquisition opportunities as our “acquisitions under evaluation.”

We consider an acquisition opportunity to be “under evaluation” if the property satisfies the following criteria: (i) the owner has advised us that the property is available for sale; (ii) our senior management team has had active discussions with the owner regarding a potential purchase of the property and such discussions have not been terminated by either party; and (iii) our senior management team is performing preliminary due diligence on the property and on the tenant in order to ascertain whether the property and tenant appear to satisfy our investment criteria. Our senior management team identified these acquisition opportunities for us through relationships that our senior management team has within the tenant, developer and brokerage communities. However, as of November 1, 2019, we do not have any contractual arrangements or non-binding letters of intent with any of the potential sellers of the properties included in our acquisitions under evaluation.

Converting any of our acquisitions under evaluation into a binding commitment with the seller is influenced by many factors including, but not limited to, the existence of other competitive bids, the satisfactory completion of all due diligence items by both parties and regulatory or lender approval, if required. The impact of these factors on the timing of any acquisition can vary based on the nature and size of each transaction. Once a binding commitment is reached with a seller, closing on the transaction is generally expected to occur within 30 to 60 days subject to the completion of routine property due diligence that is customary in real estate transactions. We have not entered into any binding or non-binder letters of intent or definitive purchase and sale agreements with respect to any of our acquisitions under evaluation. Accordingly, there can be no assurance that we will complete the acquisition of any of our acquisitions under evaluation.

Acquisition Opportunities from CTO

Our exclusivity and ROFO agreement requires CTO, prior to seeking to sell any of CTO’s single-tenant, net leased properties (whether now owned or developed and owned by CTO in the future) to a third party, to first offer to us the right to purchase any such property. As of November 1, 2019, CTO’s portfolio of single-tenant income properties, excluding the properties that are being sold or contributed to us in the formation transactions, consists of 29 single-tenant, net leased properties located in 11 states representing approximately 1.3 million square feet of leasable area and has a weighted-average remaining lease term as of November 1, 2019 of 13.8 years.

Our exclusivity and ROFO agreement with CTO also precludes CTO from acquiring any single-tenant, net leased properties after the closing of this offering unless CTO first offers that opportunity to us and our independent directors decline to pursue the opportunity. However, this restriction will not apply to any single-tenant, net leased property that (i) was under contract for purchase by CTO or an affiliate of CTO as of the closing date of this offering, where such contract is not assignable to us and, despite commercially reasonable efforts by CTO, the seller will not agree to an assignment of the contract to us, or (ii) prior to the closing of this offering, CTO has identified or designated as a potential “replacement property” in connection with an open (i.e., not yet completed) like-kind exchange under Section 1031 of the Code.

As of November 1, 2019, CTO has entered into purchase and sale contracts for CTO to purchase two single-tenant, net leased properties for an aggregate purchase price of approximately $14.5 million. It is not anticipated that CTO will identify or designate these properties as potential “replacement properties,” as described above. The acquisition of these properties is still subject to, among other things, customary closing conditions and the satisfactory completion of due diligence. It is expected that the acquisition of these properties will remain subject to ongoing due diligence at the time of the closing of this offering. The contracts providing for the acquisition of these properties by CTO are not assignable to us. Although CTO will be obligated to use commercially reasonable efforts to cause the sellers to agree to an assignment of these contracts to us, we are unable to determine at this time whether the sellers of these properties will agree to such an assignment. Accordingly, we cannot assure you that we will acquire these properties on the terms and timing described above or at all.

In addition, as of November 1, 2019, CTO has entered into non-binding letters of intent to acquire four single-tenant, net leased properties for an aggregate purchase price of approximately $21.1 million. CTO does not expect to enter into a binding purchase and sale contract with the seller of these properties prior to the closing of this offering, and it is not anticipated that CTO will identify or designate these properties as potential “replacement properties,” as described above. Accordingly, pursuant to the terms of the exclusivity and ROFO agreement, CTO will be precluded from acquiring these properties, after the closing of this offering, unless CTO first offers that opportunity to us and our independent directors decline to pursue the opportunity. We cannot assure you that we will acquire these properties on the terms and timing described above or at all.

Investment Highlights

The following investment highlights describe what we believe are some of the key considerations for investing in our company:

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Stability and Strength of Cash Flows in our Initial Portfolio. Our 100% occupied initial portfolio provides us with stable, long-term cash flows. Our initial portfolio of 20 properties is diversified by tenant and geography with annualized base rent of approximately $12.5 million as of September 30, 2019. We have no lease expirations prior to January 31, 2024. In addition, approximately 54.2% of the leases in our initial portfolio (based on annualized base rent as of September 30, 2019) provide for increases in contractual base rent during the current term. Only four of our initial portfolio’s 16 tenants contributed more than 6% of our initial portfolio’s annualized base rent as of September 30, 2019. Our largest tenant, Wells Fargo N.A., and our second largest tenant, Hilton Grand Vacations, contributed approximately 25.0% and 18.2%, respectively, of our initial portfolio’s annualized base rent as of September 30, 2019. Our strategy targets a scaled portfolio that, over time, will:

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derive no more than 10% of the portfolio’s annualized base rent from any single tenant, irrespective of the tenant’s credit rating;

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derive no more than 10% of the portfolio’s annualized base rent from any single industry;

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derive no more than 5% of the portfolio’s annualized base rent from any single property; and

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maintain significant geographic diversification.

Although our strategy targets a scaled portfolio that, over time, meets the diversification criteria described above, as of September 30, 2019, our initial portfolio:

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had two tenants that individually contributed more than 10% of our annualized base rent;

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derived more than 10% of our annualized base rent from three industries;

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derived more than 5% of our annualized base rent from each of seven properties; and

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had significant geographic concentration in the West and South regions of the United States (as defined by the U.S. Census Bureau).

We believe portfolio diversification decreases the impact from an adverse event that affects a specific tenant or region.

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Creditworthy Tenants. As of September 30, 2019, approximately 38.2% of our initial portfolio’s annualized base rent was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency. As part of our overall growth strategy, we will seek to lease and acquire properties leased to creditworthy tenants that meet our underwriting and operating guidelines. Prior to entering into any acquisition or lease transaction, our Manager’s credit analysis and underwriting professionals will conduct a review of a proposed tenant’s credit quality based on our established underwriting methodologies. In addition, our Manager will consistently monitor the credit quality of our portfolio by actively reviewing the creditworthiness of our tenants. We anticipate that these reviews will include periodic assessments of the operating performance of each of our tenants and annual evaluations of the credit ratings of each of our tenants, including any changes to the credit ratings of such tenants (or the parents of such tenants) as published by a recognized credit rating agency. We believe that our Manager’s focus on creditworthy tenants will increase the stability of our rental revenue.

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Attractive Locations in Major or Fast-Growing Markets. The properties in our initial portfolio are primarily located in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. Approximately 82% of our initial portfolio’s annualized base rent as of September 30, 2019 was derived from properties (i) located in MSAs with populations greater than one million and unemployment rates less than 3.6% and (ii) where the mean household income within a three-mile radius of the property is greater than $88,000. We believe that properties located in major metropolitan and growth areas benefit from certain advantageous attributes as compared to less densely populated areas, including supply constraints, barriers to entry, near-term and long-term prospects for job creation, population growth and rental rate growth. In addition, we believe that properties located in or in close proximity to major MSAs and growth markets generally have lower vacancy rates because they can potentially be leased to a broader range of tenants or redeveloped for different uses.

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Diverse Initial Portfolio. We believe that our initial portfolio is diversified by tenant and geography. Our initial portfolio is diversified with 16 tenants operating in 13 industries across 15 markets in ten states.

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Growth Oriented Balance Sheet. Upon completion of this offering and the related formation transactions, we will have no outstanding debt. We have obtained commitments

for a $100 million unsecured revolving credit facility with a four year term and expect to enter into the facility concurrently with the completion of this offering. We expect that the credit facility will be available for funding future acquisitions and general corporate purposes. We intend to manage our balance sheet so that we have access to multiple sources of capital in the future that may offer us the opportunity to lower our cost of funding and further diversify our sources of capital. We intend to use leverage, in-line with industry standards, to continue to grow our net leased property portfolio.

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Platform Allows for Significant Growth. We expect to build on our senior management team’s experience in net lease real estate investing and leverage CTO’s established and developed origination, underwriting, financing, documentation and property management capabilities to achieve attractive risk-adjusted growth.

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Focused Investment Strategy. We seek to acquire, own and operate primarily freestanding, single-tenant commercial real estate properties primarily located in our target markets leased primarily pursuant to triple-net, long-term leases. Within our target markets, we will focus on investments in single-tenant retail and office properties. We will target tenants in industries that we believe are favorably impacted by current macroeconomic trends that support consumer spending, such as strong and growing employment and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the growing e-commerce retail sector. We also will seek to invest in properties that are net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their market and have rent levels at or below market rent levels. Furthermore, we believe that the size of our company will, for at least the near term, allow us to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.

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Disciplined Underwriting Approach. The net leased properties that we target for acquisition generally will be under long-term leases and occupied by a single tenant, consistent with our initial portfolio. In addition, we may invest in properties that we believe have strong long-term real estate fundamentals (such as attractive demographics, infill locations, desirable markets and favorable rent coverage ratios), would be suitable for use by different types of tenants or alternative uses, offer attractive risk-adjusted returns and possess characteristics that reduce our real estate investment risks. In considering the potential acquisition of a property, we also evaluate how in-place rental rates compare to current market rental rates, as well as the likelihood of an increase in the rental rate upon extension of the in-place lease or re-tenanting of the property. We seek long-term leases, typically with initial lease terms of over 8 years, plus tenant renewal options. In addition, we target leases with a triple-net structure which obligates our tenants to pay all or most property-level expenses.

Market Opportunity

According to a market study prepared for us in connection with this offering by RCG, the single-tenant, net lease market has expanded steadily over the last several years, and investor demand for net leased properties continued to gain momentum into 2019. Unlike a gross lease, which places the financial responsibility for most expenses with the property owner, the net lease structure shifts the majority or entirety of expenses for property taxes, insurance, maintenance and

often utilities and capital expenditures, to the lessee, in addition to rent payments. Net leases are generally executed for an initial term of 10 to 15 years, but 20 and 25 year leases are not uncommon. Lease agreements often include multiple options for the tenant to extend, and may include terms for periodic rent increases. Comparatively, multi-tenant commercial real estate properties under gross leases often have average initial lease terms between five and ten years with shorter or fewer options to extend. Rent escalation is also commonly embedded in the net lease terms as a specified percentage increase of existing rent per year, or determined by reference to an inflation measure such as the Consumer Price Index. With cash flows that are intended to be passive, stable and paid at regular intervals, net leased real estate is similar, in many ways, to interest-bearing corporate bonds, but with the additional potential for appreciation in the value of the underlying property.

Summary Risk Factors

You should carefully consider the risks discussed in the “Risk Factors” section of this prospectus before investing in our common stock. Some of these risks include:

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We are subject to risks related to the ownership of commercial real estate that could affect the performance and value of our properties.

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Adverse 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.

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Our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us.

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Our 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.

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CTO may be unable to obtain or retain the executive officers and other personnel that it provides to us through our Manager.

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There are conflicts of interest in our relationships with our Manager, which could result in outcomes that are not in our best interests.

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Our 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.

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The management agreement with our Manager and the exclusivity and 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.

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Our 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.

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An increase in interest rates would increase our interest costs on our variable rate debt and could adversely impact our ability to refinance existing debt or sell assets.

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Failure to qualify as a REIT, or failure 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.

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There 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 common stockholders.

Structure and Formation of Our Company

Our Operating Partnership

Our wholly-owned subsidiary, Alpine Income Property GP, LLC, is the sole general partner of our Operating Partnership. Substantially all of our assets will be held by, and our operations will be conducted through, our Operating Partnership. Following the completion of this offering, the concurrent CTO private placement and the formation transactions, we will have a total 86.6% ownership interest in our Operating Partnership (88.0% if the underwriters exercise their option to purchase additional shares of our common stock in full), with CTO holding, directly and indirectly, a 13.4% ownership interest in our Operating Partnership (12.0% if the underwriters exercise their option to purchase additional shares of our common stock in full). Our interest in our Operating Partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our Operating Partnership in proportion to our percentage ownership. We, through our wholly-owned subsidiary, Alpine Income Property GP, LLC, will generally have the exclusive power under the partnership agreement to manage and conduct the business and affairs of our Operating Partnership, subject to certain approval and voting rights of the limited partners, which are described more fully below in “Description of the Partnership Agreement of Alpine Income Property OP, LP.” Our board of directors will manage our business and affairs.

Beginning on and after the date that is 12 months after the issuance of the OP units, each limited partner of our Operating Partnership will have the right to require our Operating Partnership to redeem part or all of its OP units for cash, based upon the value of an equivalent number of shares of our common stock at the time of the redemption, or, at our election, shares of our common stock on a one-for-one basis, subject to certain adjustments and the restrictions on ownership and transfer of our stock set forth in our charter and described under the section entitled “Description of Capital Stock—Restrictions on Ownership and Transfer.” Each redemption of OP units will increase our percentage ownership interest in our Operating Partnership and our share of its cash distributions and profits and losses. See “Description of the Partnership Agreement of Alpine Income Property OP, LP.”

Formation Transactions

Prior to completion of this offering, the concurrent CTO private placement and the formation transactions, our properties were owned and managed by CTO. Through the formation transactions, the following have occurred or will occur prior to, concurrently with or shortly after the completion of this offering.

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We were formed as a Maryland corporation, Alpine Income Property GP, LLC was formed as a Delaware limited liability company and our Operating Partnership was formed as a Delaware limited partnership in August 2019. In connection with our formation, Mr. Albright made an initial investment in us of $1,000 in exchange for 100 shares of our

common stock. Such shares will be repurchased by us at the closing of this offering for $1,000.

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We will sell 7,500,000 shares of our common stock in this offering (or 8,625,000 shares if the underwriters exercise their option to purchase additional shares of our common stock in full) and 375,000 shares of our common stock in the concurrent CTO private placement.

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We will use approximately $9.1 million from the net proceeds from this offering and the concurrent CTO private placement to fund the purchase price payable to CTO for two of the 20 properties in our initial portfolio (we refer to these properties as the “REIT Purchased Properties”).

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We will contribute to our Operating Partnership the remaining net proceeds from this offering and the concurrent CTO private placement after our purchase of the REIT Purchased Properties and receive 7,417,557 OP units (or 8,542,557 OP units if the underwriters exercise their option to purchase additional shares of our common stock in full), in exchange.

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Our Operating Partnership will use approximately $116.8 million of the net proceeds we contribute to it to purchase 13 of the 20 properties in our initial portfolio (we refer to these 13 properties as the “OP Purchased Properties”).

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CTO and Indigo will contribute to our Operating Partnership the remaining five properties in our initial portfolio (which we refer to as the “Contributed Properties”) and receive 1,223,854 OP units in exchange. These OP Units have an initial value of approximately $24.5 million based on the assumed public offering price of $20.00, which is the mid-point of the price range set forth on the front cover of this prospectus.

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We will grant 8,000 restricted shares of common stock, in the aggregate, to our non-employee directors pursuant to the Individual Equity Incentive Plan.

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We will contribute to our Operating Partnership the REIT Purchased Properties and receive 457,443 OP units, giving us a total 86.6% ownership interest in our Operating Partnership (88.0% if the underwriters exercise their option to purchase additional shares of our common stock in full), with CTO holding, directly and indirectly, a 13.4% ownership interest in our Operating Partnership (12.0% if the underwriters exercise their option to purchase additional shares of our common stock in full).

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We expect to enter into a $100 million unsecured revolving credit facility that will be available for general corporate purposes, including the funding of potential future acquisitions. Affiliates of BMO Capital Markets Corp. and Raymond James & Associates, Inc. are expected to be lenders under our new revolving credit facility.

The amount of cash and OP units that we will pay, or issue, to CTO in exchange for the properties in our initial portfolio was determined by management and not through arm’s length negotiations with an independent third party. In determining the value of our initial portfolio, management undertook a diligence and underwriting process that took into account, among other factors, market capitalization rates, net operating income, landlord obligations to fund future capital expenditures, lease duration, functionality and ability to release should a tenant not renew its lease, tenant creditworthiness and discount rates based on tenant creditworthiness, property location, property age, comparable sales information and capitalization rates for properties leased to tenants with similar credit profiles and lease durations, tenant operating performance and the fact that brokerage commissions would not be payable in connection with the formation

transactions. No single factor was given greater weight than any other in valuing our initial portfolio. The value attributable to our initial portfolio does not necessarily bear any relationship to the value of any particular property within that portfolio. Furthermore, we did not obtain any third-party property appraisals for the properties in our initial portfolio or any other independent third-party valuations or fairness opinions in connection with the formation transactions. As a result, the consideration we have agreed to pay CTO in the formation transactions may exceed the fair market value of our initial portfolio.

The properties comprising our initial portfolio were selected from CTO’s existing income property portfolio to create an attractive and diverse portfolio of single-tenant net leased properties. Certain properties within CTO’s existing income property portfolio were not included in the initial portfolio for a number of reasons, including tenant and asset class concentration, existing debt encumbrances and tax considerations. CTO does not currently intend to sell to us any additional properties from its existing income property portfolio, nor do we currently intend to purchase any such properties.

The following chart sets forth information about our company, our Operating Partnership, certain related parties and the ownership interests therein on a pro forma basis. Ownership percentages in our company and our Operating Partnership are presented assuming that the underwriters’ option to purchase additional shares of our common stock is not exercised.

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Benefits to Related Parties

Upon completion of this offering, the concurrent CTO private placement and the formation transactions, CTO and our directors and executive officers will receive material benefits, including the following:

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In connection with the acquisition of our initial portfolio, CTO will receive a cash payment of approximately $125.9 million from us and 1,223,854 OP units from our Operating Partnership. The OP units have an aggregate initial value of approximately $24.5 million based on the assumed public offering price of $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus.

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We will have entered into indemnification agreements with each of our directors and executive officers providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against our directors and executive officers in their capacities as such. See “Management—Indemnification.”

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We and our Operating Partnership will have entered into a management agreement with our Manager, a wholly-owned subsidiary of CTO, pursuant to which our Manager will be entitled to certain fees for its services and reimbursement of certain expenses. See “Our Manager and the Management Agreement—Management Agreement.”

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We will have entered into a tax protection agreement with CTO and Indigo, pursuant to which we will agree to indemnify CTO and Indigo against certain potential adverse tax consequences to them, which may affect the way in which we conduct our business in the future, including with respect to when and under what circumstances we sell the Contributed Properties or interests therein during the tax protection period. Pursuant to the tax protection agreement, it is anticipated that the total amount of taxable built-in gain on the Contributed Properties will be approximately $10.4 million. Such indemnification obligations could result in aggregate payments of up to $3.5 million. The amount of tax is calculated without regard to any deductions, losses or credits that may be available. See “Certain Relationships and Related Person Transactions—Tax Protection Agreement.”

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We will have entered into a registration rights agreement with CTO pursuant to which we will agree to register the resale of the shares of common stock CTO has agreed to acquire in the concurrent CTO private placement. In addition, pursuant to the terms of our Operating Partnership’s partnership agreement, following the date on which we become eligible to use a registration statement on Form S-3 for the registration of securities and subject to certain further conditions as set forth in our Operating Partnership’s partnership agreement, we will be obligated to file a shelf registration statement covering the issuance or resale of shares of our common stock received by limited partners upon redemption of their OP units. See “Description of the Partnership Agreement of Alpine Income Property OP, LP—Registration Rights” for further details.

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We will have adopted the Equity Incentive Plans to provide equity incentive opportunities to our officers, employees, non-employee directors, consultants, independent contractors and agents, and will have issued, in the aggregate, thereunder 8,000 shares of restricted common stock to our non-employee directors upon completion of this offering. See “Management—Equity Incentive Plans” for further details.

Management Agreement

Upon completion of this offering, we will enter into a management agreement with our Manager. Pursuant to the terms of the management agreement, our Manager manages, operates and administers our day-to-day operations, business and affairs, subject to the direction and supervision of our board of directors and in accordance with the investment guidelines approved and monitored by our board of directors. Our Manager is subject to the direction and oversight of our board of directors. We will pay our Manager a base management fee equal to 0.375% per quarter of our “total equity” (as defined in the management agreement and based on a 1.5% annual rate), calculated and payable in cash, quarterly in arrears.

Assuming that:

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the sum of the net cash proceeds and the value of non-cash consideration from all issuances of equity securities by us or our Operating Partnership since our inception, including OP units (calculated on a daily weighted average basis) is approximately $169.2 million,

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neither we nor our Operating Partnership has repurchased any shares of our common stock or OP units, as applicable, since our inception, and

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our total equity is not adjusted to exclude any one-time events pursuant to changes in GAAP or any non-cash items,

we estimate that the base management fees that we will pay to our Manager for the fiscal year ending December 31, 2020 will total approximately $2.7 million.

Our Manager will also have the ability to earn incentive fees based on our total stockholder return exceeding an 8% cumulative annual hurdle rate subject to a high-water mark price. For more information regarding the calculation of these incentive fees, see “Our Manager and the Management Agreement—Management Agreement—Incentive Fee.”

The initial term of the management agreement will expire on the fifth anniversary of the closing date of this offering and will automatically renew for an unlimited number of successive one-year periods thereafter, unless the agreement is not renewed or is terminated in accordance with its terms.

Our independent directors will review our Manager’s performance and the management fees annually and, following the initial term, the management agreement may be terminated annually upon the affirmative vote of two-thirds of our independent directors or upon a determination by the holders of a majority of the outstanding shares of our common stock, based upon (i) unsatisfactory performance that is materially detrimental to us or (ii) a determination that the management fees payable to our Manager are not fair, subject to our Manager’s right to prevent such termination due to unfair fees by accepting a reduction of management fees agreed to by two-thirds of our independent directors. We may also terminate the management agreement for cause at any time, including during the initial term, without the payment of any termination fee, with 30 days’ prior written notice from our board of directors. During the initial term of the management agreement, we may not terminate the management agreement except for cause.

We will pay directly or reimburse our Manager for certain expenses, if incurred by our Manager. We will not reimburse any compensation expenses incurred by our Manager or its

affiliates. Expense reimbursements to our Manager will be made in cash on a quarterly basis following the end of each quarter. In addition, we will pay all of our operating expenses, except those specifically required to be borne by our Manager pursuant to the management agreement.

For more information about the management agreement, see “Our Manager and the Management Agreement—Management Agreement.”

Exclusivity and ROFO Agreement

Upon completion of this offering and the concurrent CTO private placement, we will enter into an exclusivity and ROFO agreement with CTO. During the term of the exclusivity and ROFO agreement, CTO will not, and will cause each of its affiliates (which for purposes of the exclusivity and ROFO agreement will not include our company and our subsidiaries) not to, acquire, directly or indirectly, a single-tenant, net leased property, unless:

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CTO has notified us of the opportunity by delivering a written notice (which may be made by email) containing a description of the opportunity and the terms of the opportunity to the chair of our nominating and corporate governance committee (or any successor committee performing one or more of the functions of such committee), and we have affirmatively rejected the opportunity in writing (which may be made by email), or we have failed to notify CTO in writing (which may be made by email) within ten business days after receipt of CTO’s notice that we intend to pursue the opportunity;

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the opportunity involves the direct or indirect acquisition of (i) an entity that owns a portfolio of commercial income properties that includes, among others, single-tenant, net leased properties, or (ii) a portfolio of commercial income properties that includes, among others, single-tenant, net leased properties, in either case, where not more than 30% of the value of such portfolio, as reasonably determined by CTO, in consultation with our independent directors, consists of single-tenant, net leased properties;

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the opportunity involves a property that was under contract for purchase by CTO or an affiliate of CTO as of the closing date of this offering, such contract is not assignable to us and, despite commercially reasonable efforts by CTO, the seller will not agree to an assignment of the contract to us; or

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the opportunity involves a property which, prior to the closing of this offering, has been identified or designated by CTO as a potential “replacement property” in connection with an open (i.e., not yet completed) like-kind exchange under Section 1031 of the Code.

The terms of the exclusivity and ROFO agreement will not restrict CTO or any of its affiliates from providing financing for a third party’s acquisition of single-tenant, net leased properties or from developing and owning any single-tenant, net leased property.

For purposes of the exclusivity and ROFO agreement, “single-tenant, net leased property” means a property that is net leased, on a triple-net or double-net basis, to a single tenant or, if such property is net leased to more than one tenant, 95% or more of the rental revenue derived from the ownership and leasing of such property is attributable to a single tenant.

Pursuant to the exclusivity and ROFO agreement, CTO will agree that neither CTO nor any of its affiliates (which for purposes of the exclusivity and ROFO agreement will not include our

company and our subsidiaries) will enter into any agreement with any third party for the purchase and/or sale of any single-tenant, net leased property that:

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is owned by CTO or any of its affiliates as of the closing date of this offering and that is not a part of our initial portfolio; and

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is owned by CTO or any of its affiliates after the closing date of this offering,

without first offering us the right to purchase such property.

The term of the exclusivity and ROFO agreement will commence on the date of the closing of this offering and will continue for so long as the management agreement is in effect.

Conflicts of Interest

Conflicts of interest may exist or could arise in the future with CTO and its affiliates, including our Manager, the individuals who serve as our executive officers and executive officers of CTO, any individual who serves as a director of our company and as a director of CTO and any limited partner of our Operating Partnership. Conflicts may include, without limitation: conflicts arising from the enforcement of agreements between us and CTO or our Manager; conflicts in the amount of time that executive officers and employees of CTO, who are provided to us through our Manager, will spend on our affairs versus CTO’s affairs; and conflicts in future transactions that we may pursue with CTO and its affiliates. We do not generally expect to enter into joint ventures with CTO, but if we do so, the terms and conditions of our joint venture investment will be subject to the approval of a majority of disinterested directors of our board of directors.

In addition, we are subject to conflicts of interest arising out of our relationships with our Manager. Pursuant to the management agreement, our Manager is obligated to supply us with our senior management team. However, our Manager is not obligated to dedicate any specific CTO personnel exclusively to us, nor are the CTO personnel provided to us by our Manager obligated to dedicate any specific portion of their time to the management of our business. Additionally, our Manager is a wholly-owned subsidiary of CTO. All of our executive officers are executive officers and employees of CTO and one of our officers (John P. Albright) is also a member of CTO’s board of directors. As a result, our Manager and the CTO personnel it provides to us may have conflicts between their duties to us and their duties to, and interests in, CTO.

In addition to our initial portfolio, we may acquire or sell single-tenant, net leased properties in which our Manager or its affiliates have or may have an interest. Similarly, our Manager or its affiliates may acquire or sell single-tenant, net leased properties in which we have or may have an interest. Although such acquisitions or dispositions may present conflicts of interest, we nonetheless may pursue and consummate such transactions. Additionally, we may engage in transactions directly with our Manager or its affiliates, including the purchase and sale of all or a portion of a portfolio asset. If we acquire a single-tenant, net leased property from CTO or one of its affiliates or sell a single-tenant, net leased property to CTO or one of its affiliates, the purchase price we pay to CTO or one of its affiliates or the purchase price paid to us by CTO or one of its affiliates may be higher or lower, respectively, than the purchase price that would have been paid to or by us if the transaction were the result of arms’ length negotiations with an unaffiliated third party.

In deciding whether to issue additional debt or equity securities, we will rely in part on recommendations made by our Manager. While such decisions are subject to the approval of our

board of directors, our Manager is entitled to be paid a base management fee that is based on our “total equity” (as defined in the management agreement). As a result, our Manager may have an incentive to recommend that we issue additional equity securities at dilutive prices.

All of our executive officers are executive officers and employees of CTO. These individuals and other CTO personnel provided to us through our Manager devote as much time to us as our Manager deems appropriate. However, our executive officers and other CTO personnel provided to us through our Manager may have conflicts in allocating their time and services between us, on the one hand, and CTO and its affiliates, on the other. During a period of prolonged economic weakness or another economic downturn affecting the real estate industry or at other times when we need focused support and assistance from our Manager and the CTO executive officers and other personnel provided to us through our Manager, we may not receive the necessary support and assistance we require or that we would otherwise receive if we were self-managed.

Additionally, although we will enter into the exclusivity and ROFO agreement with CTO, the agreement contains exceptions to CTO’s exclusivity for (i) opportunities that include only an incidental interest in single-tenant, net leased properties (ii) any opportunity that involves a property that was under contract for purchase by CTO or an affiliate of CTO as of the closing date of this offering, where such contract is not assignable to us and, despite commercially reasonable efforts by CTO, the seller will not agree to an assignment of the contract to us; and (iii) any opportunity that involves a property which, prior to the closing of this offering, has been identified or designated by CTO as a potential “replacement property” in connection an open (i.e., not yet completed) like-kind exchange under Section 1031 of the Code. Accordingly, the exclusivity and ROFO agreement will not prevent CTO from pursuing certain acquisition opportunities that otherwise satisfy our then-current investment criteria.

Our directors and executive officers have duties to our company under applicable Maryland law in connection with their management of our company. At the same time, our wholly-owned subsidiary, Alpine Income Property GP, LLC, has fiduciary duties, as the general partner, to our Operating Partnership and to the limited partners under Delaware law in connection with the management of our Operating Partnership. These duties as a general partner to our Operating Partnership and its partners may come into conflict with the duties of our directors and executive officers to our company. Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of loyalty and care and which generally prohibits such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest. The partnership agreement provides that in the event of a conflict between the interests of our stockholders on the one hand and the limited partners of our Operating Partnership on the other hand, the general partner will endeavor in good faith to resolve the conflict in a manner not adverse to either our stockholders or the limited partners; provided, however, that so long as we own a controlling interest in our Operating Partnership, any such conflict that we, in our sole and absolute discretion, determine cannot be resolved in a manner not adverse to either our stockholders or the limited partners of our Operating Partnership shall be resolved in favor of our stockholders, and we shall not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the limited partners in connection with such decisions.

We intend to adopt policies that are designed to reduce certain potential conflicts of interests. See “Policies with Respect to Certain Activities—Conflict of Interest Policies.”

Distribution Policy

We intend to pay cash distributions to our common stockholders out of assets legally available for distribution. We intend to make a pro rata distribution with respect to the period commencing upon the completion of this offering and ending on December 31, 2019, based on a distribution rate of $0.20 per share of common stock for a full quarter. On an annualized basis, this would be $0.80 per share of common stock, or an annualized distribution rate of approximately 4.0% based on the mid-point of the price range set forth on the front cover of this prospectus. We intend to maintain our initial distribution rate for the 12 months following the completion of this offering unless our financial condition, results of operations, funds from operations, or FFO, adjusted funds from operations, or AFFO, liquidity and cash flows, general business prospects, economic conditions or other factors differ materially from the assumptions used in projecting our initial distribution rate. We intend to make distributions that will enable us to meet the distribution requirements applicable to REITs and to eliminate or minimize our obligation to pay corporate-level federal income and excise taxes. We do not intend to reduce the expected distribution per share if the underwriters’ option to purchase additional shares is exercised.

Any distributions will be at the sole discretion of our board of directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law, including restrictions on distributions under Maryland law, and such other factors as our board of directors deems relevant.

Restrictions on Ownership and Transfer

Our charter provides that, subject to certain exceptions, no person may beneficially or constructively own more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock. Our charter also prohibits any person from (i) beneficially owning shares of our capital stock to the extent that such beneficial ownership would result in our being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of the taxable year), (ii) transferring shares of our capital stock to the extent that such transfer would result in shares of our capital stock being beneficially owned by less than 100 persons (determined under the principles of Section 856(a)(5) of the Code), (iii) beneficially or constructively owning shares of our capital stock to the extent such beneficial or constructive ownership would cause us to constructively own 10% or more of the ownership interests in a tenant (other than a taxable REIT subsidiary, or TRS) of our real property within the meaning of Section 856(d)(2)(B) of the Code or (iv) beneficially or constructively owning or transferring shares of our capital stock if such ownership or transfer would otherwise cause us to fail to qualify as a REIT. The foregoing restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

Our board of directors, in its sole discretion, may prospectively or retroactively exempt a person from the limits described above and may establish or increase an excepted holder percentage limit for such person. The person seeking an exemption must provide to our board of directors such representations, covenants and undertakings as our board of directors may deem appropriate in order to conclude that granting the exemption will not cause us to fail to qualify as

a REIT. Our board of directors may not grant such an exemption to any person if such exemption would result in our failing to qualify as a REIT.

These ownership limitations could have the effect of discouraging a takeover or other transaction in which holders of our common stock might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests. For further details regarding stock ownership limits, see “Description of Capital Stock—Restrictions on Ownership and Transfer.”

Tax Status

We intend to elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our short taxable year ending December 31, 2019. We believe that, commencing with such taxable year, we will be organized and will operate in such a manner as to qualify for taxation as a REIT under the U.S. federal income tax laws, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we are eligible to take advantage of certain specified reduced disclosure and other requirements that are otherwise generally applicable to public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We have irrevocably opted-out of the extended transition period afforded to emerging growth companies in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As a result, we will comply with new or revised accounting standards on the same time frames as other public companies that are not emerging growth companies.

We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual gross revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities and (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

We are also a “smaller reporting company” as defined in Regulation S-K under the Securities Act and may take advantage of certain of the scaled disclosures available to smaller reporting companies. We may be a smaller reporting company even after we are no longer an “emerging growth company.”

Corporate Information

We were formed in August 2019, and our principal offices are located at 1140 N. Williamson Blvd., Suite 140, Daytona Beach, Florida 32114. Our telephone number is (386) 274-2202.

The Offering

Common stock offered by us

7,500,000 shares (plus up to an additional 1,125,000 shares that we may issue and sell upon the exercise of the underwriters’ option to purchase additional shares)

Common stock to be outstanding after this offering
and the concurrent CTO private placement

7,883,000 shares of common stock (1)

Common stock and OP units to be outstanding after
this offering, the concurrent CTO private placement and the formation transactions

9,106,854 shares of common stock (1) and OP units (2)

Use of proceeds

We expect to receive net proceeds from this offering and the concurrent CTO private placement of approximately $144.7 million (or approximately $165.6 million if the underwriters exercise their option to purchase additional shares in full), assuming a public offering price of $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us. We intend to use approximately $9.1 million of the net proceeds from this offering and the concurrent CTO private placement to fund the cash purchase price for the REIT Purchased Properties. We will contribute these properties and the remaining net proceeds from this offering and the concurrent CTO private placement to our Operating Partnership in exchange for OP units. We intend to cause our Operating Partnership to use approximately $116.8 million of the remaining net proceeds from this offering and the concurrent CTO private placement to fund the cash purchase price for the OP Purchased Properties. Any remaining net proceeds will be used for general corporate and working capital purposes, including possible future property acquisitions. See “Use of Proceeds.”

Listing

We have applied to list our common stock on the New York Stock Exchange, or the NYSE, under the symbol “PINE.”

Risk factors

Investing in our common stock involves risks. You should carefully read and consider the information set forth under “Risk Factors” beginning on page 25 of this prospectus and all other information in this prospectus before making a decision to invest in our common stock.

(1)

Includes (a) 7,500,000 shares of our common stock to be issued in this offering, (b) 375,000 shares of our common stock to be issued in the concurrent CTO private placement and (c) 8,000 restricted shares of common stock to be granted, in the aggregate, to our non-employee directors in connection with the completion of this offering pursuant to the Individual Equity Incentive Plan. Excludes up to (a) 1,125,000 shares of our common stock issuable upon the exercise in full of the underwriters’ option to purchase additional shares, (b) 751,389 shares of our common stock available for future issuance pursuant to the Equity Incentive Plans, (c) 1,223,854 shares of our common stock issuable by us, at our option, upon redemption of the OP units to be issued to CTO and Indigo in the formation transactions and (d) 100 shares of our common stock that were issued to John P. Albright, President and Chief Executive Officer of our company and CTO, for $1,000 in connection with our initial capitalization and that will be repurchased by us at cost at the closing of this offering.

(2)	Includes 1,223,854 OP units to be issued to CTO and Indigo in the formation transactions. OP units are redeemable for cash or, at our election, shares of our common stock on a one-for-one basis, subject to adjustment in certain circumstances, beginning one year after the issuance of any OP units.

Summary Selected Historical and Pro Forma Financial Information and Other Data

Set forth below is summary selected financial information and other data presented on (i) a historical basis for Alpine Income Property Trust Predecessor and (ii) a pro forma basis for our company after giving effect to the completion of this offering, the concurrent CTO private placement, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements beginning on page F-2 of this prospectus. We have not presented historical data for Alpine Income Property Trust, Inc. because we have not had any corporate activity since our formation other than the issuance of common stock in connection with our initial capitalization and activity in connection with this offering and the formation transactions. Accordingly, we do not believe that a presentation of the historical results of Alpine Income Property Trust, Inc. would be meaningful. Prior to or concurrently with the completion of this offering and the concurrent CTO private placement, we will consummate the formation transactions pursuant to which, among other things, we will acquire our initial portfolio from CTO. Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our Operating Partnership. For more information regarding the formation transactions, please see “Structure and Formation of Our Company.”

Alpine Income Property Trust Predecessor’s historical combined balance sheet data as of December 31, 2018 and 2017 and historical combined operating data for the years ended December 31, 2018 and 2017 have been derived from Alpine Income Property Trust Predecessor’s audited historical combined financial statements included elsewhere in this prospectus, reflect the financial position and results of operations of 15 of the 20 single-tenant properties in our initial portfolio and are not necessarily indicative of our future performance. Alpine Income Property Trust Predecessor’s historical combined balance sheet data as of September 30, 2019 and historical combined operating data for the nine months ended September 30, 2019 and 2018 have been derived from Alpine Income Property Trust Predecessor’s unaudited historical combined financial statements included elsewhere in this prospectus. In management’s opinion, Alpine Income Property Trust Predecessor’s unaudited interim financial and operating data have been prepared in accordance with GAAP on the same basis as its audited financial statements and related notes included elsewhere in this prospectus and, in the opinion of management, reflect all adjustments consisting only of normal recurring adjustments that management considers necessary to state fairly the financial information as of and for the periods presented. The historical combined financial data included below and set forth elsewhere in this prospectus are not necessarily indicative of our future performance, and results for any interim period are not necessarily indicative of the results for any full year.

The summary selected pro forma financial and operating data as of September 30, 2019 and for the nine months ended September 30, 2019 and the year ended December 31, 2018 assume the completion of this offering, the concurrent CTO private placement, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements had occurred on September 30, 2019 for purposes of the unaudited pro forma consolidated balance sheet data and on January 1, 2018 for purposes of the unaudited pro forma consolidated statements of operations data. Our pro forma financial information is not necessarily indicative of what our actual financial position and results of operations would have been as of the date and for the period indicated, nor does it purport to represent our future financial position or results of operations.

You should read the following summary selected financial and other data together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business and Properties” and the historical and pro forma financial statements and related notes appearing elsewhere in this prospectus.


Operating Data:

	Nine Months Ended September 30,							Year Ended December 31,
	2019 (Pro Forma) (Unaudited)			2019 (Historical) (Unaudited)		2018 (Historical) (Unaudited)		2018 (Pro Forma) (Unaudited)			2018 (Historical)		2017 (Historical)

Revenues

Lease Income	$	10,593,307		$	9,426,482	$	8,834,994	$	14,183,736		$	11,719,549	$	8,454,498


Total Revenues		10,593,307			9,426,482		8,834,994		14,183,736			11,719,549		8,454,498


Direct Costs of Revenues

Real Estate Expenses		1,138,539			1,138,539		1,064,257		1,619,523			1,619,523		1,468,792


Total Direct Costs of Revenues		1,138,539			1,138,539		1,064,257		1,619,523			1,619,523		1,468,792

Interest Expense		129,375			—		—		172,500			—		286,242

General and Administrative Expenses		3,246,000			1,415,330		966,685		4,328,000			1,184,352		829,349

Depreciation and Amortization		4,267,106			3,946,794		3,643,709		5,689,476			4,900,719		3,057,346


Total Expenses		8,781,020			6,500,663		5,674,651		11,809,499			7,704,594		5,641,729


Net Income		1,812,287		$	2,925,819	$	3,160,343		2,374,237		$	4,014,955	$	2,812,769


Less: Net Income Attributable to Noncontrolling Interest		(243,550	)						(319,070	)


Net Income Attributable to Alpine Income Property Trust, Inc.	$	1,568,737						$	2,055,167


Pro forma weighted average common shares outstanding—basic		7,883,000							7,883,000

Pro forma weighted average common shares outstanding—diluted		9,106,854							9,106,854

Pro forma basic earnings per share	$	0.20						$	0.26

Pro forma diluted earnings per share	$	0.17						$	0.23


Balance Sheet Data:

	As of September 30,				As of December 31,
	2019 (Pro Forma) (Unaudited)		2019 (Historical) (Unaudited)		2018 (Historical)		2017 (Historical)

Total Real Estate, at cost	$	134,976,509	$	143,943,628	$	120,151,964	$	115,342,470

Real Estate—Net	$	134,976,509	$	132,338,606	$	111,151,636	$	109,583,922

Cash and Cash Equivalents	$	18,170,750	$	60,267	$	8,258	$	6,900

Intangible Lease Assets—Net	$	17,783,964	$	12,890,412	$	10,555,596	$	11,545,306

Straight-Line Rent Adjustment	$	—	$	1,819,372	$	1,483,390	$	1,032,824

Deferred Expenses	$	585,000	$	2,911,836	$	3,223,768	$	3,640,039

Other Assets	$	—	$	220,713	$	128,300	$	169,402

Total Assets	$	171,516,223	$	150,241,206	$	126,550,948	$	125,978,393

Accounts Payable, Accrued Expenses, and Other Liabilities	$	—	$	426,778	$	307,133	$	3,464,844

Prepaid Rent and Deferred Revenue	$	—	$	337,466	$	344,682	$	371,937

Intangible Lease Liabilities—Net	$	2,363,822	$	1,899,047	$	1,710,037	$	1,761,764

Total Liabilities	$	2,363,822	$	2,663,291	$	2,361,852	$	5,598,545

Total Equity	$	169,152,401	$	147,577,915	$	124,189,096	$	120,379,848


Other Data:

	Nine Months Ended September 30,						Year Ended December 31,
	2019 (Pro Forma) (Unaudited)		2019 (Historical) (Unaudited)		2018 (Historical) (Unaudited)		2018 (Pro Forma) (Unaudited)		2018 (Historical) (Unaudited)		2017 (Historical) (Unaudited)

FFO	$	6,079,393	$	6,872,613	$	6,804,052	$	8,063,713	$	8,915,674	$	5,870,115

AFFO	$	5,753,859	$	7,009,039	$	6,744,456	$	7,567,426	$	8,770,636	$	5,507,028

(1)

FFO and AFFO are non-GAAP financial measures. For definitions of FFO and AFFO, and reconciliations of these metrics to net income, the most directly comparable GAAP financial measure, and a statement of why our management believes the presentation of these metrics provide useful information to investors and any additional purposes of which management uses these metrics, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”

RISK FACTORS

Investing in our common stock involves risks. Before you invest in our common stock, you should carefully consider the risk factors below together with all of the other information included in this prospectus. If any of the risks discussed in this prospectus were to occur, our business, financial condition, liquidity, cash flows, results of operations and prospects and our ability to service our debt and make distributions to our stockholders could be materially and adversely affected (which we refer to collectively as “materially and adversely affecting us” or having “a material adverse effect on us” and comparable phrases), the market price of our common stock could decline significantly, and you could lose all or part of your investment in our common stock. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section in this prospectus entitled “Special Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Properties

We are subject to risks related to the ownership of commercial real estate that could affect the performance and value of our properties.

Factors beyond our control can affect the performance and value of our properties. Our core business is the ownership of single-tenant commercial net leased properties. Accordingly, our performance is subject to risks incident to the ownership of commercial real estate, including:

•

inability to collect rents from tenants due to financial hardship, including bankruptcy;

•

changes in local real estate conditions in the markets where our properties are located, including the availability and demand for the properties we own;

•

changes in consumer trends and preferences that affect the demand for products and services offered by our tenants;

•

adverse changes in national, regional and local economic conditions;

•

inability to lease or sell properties upon expiration or termination of existing leases;

•

environmental risks, including the presence of hazardous or toxic substances on our properties;

•

the subjectivity of real estate valuations and changes in such valuations over time;

•

illiquidity of real estate investments, which may limit our ability to modify our portfolio promptly in response to changes in economic or other conditions;

•

zoning or other local regulatory restrictions, or other factors pertaining to the local government institutions which inhibit interest in the markets in which our properties are located;

•

changes in interest rates and the availability of financing;

•

competition from other real estate companies similar to ours and competition for tenants, including competition based on rental rates, age and location of properties and the quality of maintenance, insurance and management services;

•

acts of God, including natural disasters, which may result in uninsured losses;

•

acts of war or terrorism, including consequences of terrorist attacks;

•

changes in tenant preferences that reduce the attractiveness and marketability of our properties to tenants or cause decreases in market rental rates;

•

costs associated with the need to periodically repair, renovate or re-lease our properties;

•

increases in the cost of our operations, particularly maintenance, insurance or real estate taxes which may occur even when circumstances such as market factors and competition cause a reduction in our revenues;

•

changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; and

•

commodities prices.

The occurrence of any of the risks described above may cause the performance and value of our properties to decline, which could materially and adversely affect us.

Our results of operations, as well as the results of operations of our tenants, are sensitive to changes in U.S., global and local regions or markets that impact our tenants’ businesses. Adverse changes or developments in U.S., global or regional economic conditions may impact our tenants’ financial condition, which may adversely impact their ability to make rental payments to us pursuant to the leases they have with us and may also impact their current or future leasing practices. Adverse economic conditions such as high unemployment levels, rising interest rates, increased tax rates and increasing fuel and energy costs may have an impact on the results of operations and financial conditions of our tenants, which would likely adversely impact us. During periods of economic slowdown and declining demand for real estate, we may experience a general decline in rents or increased rates of default under our leases. A lack of demand for rental space could adversely affect our ability to maintain our current tenants and gain new tenants, which may affect our growth, profitability and ability to pay dividends.

Our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us.

Each of our properties is occupied by a single tenant. Therefore, the success of our investments in these properties is materially dependent upon the performance of our tenants. The financial performance of any one of our tenants is dependent on the tenant’s individual business, its industry and, in many instances, the performance of a larger business network that the tenant may be affiliated with or operate under. The financial performance of any one of our tenants could be adversely affected by poor management, unfavorable economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant’s products or services or other factors over which neither they nor we have control. Our portfolio includes properties leased to single tenants that operate in multiple locations, which means we own multiple properties operated by the same tenant. To the extent we own multiple properties operated by one tenant, the general failure of that single tenant or a loss or significant decline in its business could materially and adversely affect us.

At any given time, any tenant may experience a decline in its business that may weaken its operating results or the overall financial condition of individual properties or its business as a whole. Any such decline may result in our tenant failing to make rental payments when due, declining to extend a lease upon its expiration, delaying occupancy of our property or the commencement of the lease or becoming insolvent or declaring bankruptcy. We depend on our tenants to operate their businesses at the properties we own in a manner which generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes, make repairs and otherwise maintain our properties. The ability of our tenants to fulfill their obligations under our leases may depend, in part, upon the overall profitability of their operations. Cash flow generated by certain tenant businesses may not be sufficient for a tenant to meet its obligations to us pursuant to the applicable lease. We could be materially and adversely affected if a tenant representing a significant portion of our operating results or a number of our tenants were unable to meet their obligations to us.

We invest in properties leased, in many instances, to tenants engaged in businesses that we believe are generally insulated from the impact of e-commerce. While we believe our assessment to be accurate, businesses previously thought to be resistant to the pressure of the increasing level of e-commerce have ultimately been proven to be susceptible to competition from e-commerce. Overall business conditions and the impact of technology, particularly in the retail industry, are rapidly changing, and our tenants may be adversely affected by technological innovation, changing consumer preferences and competition from non-traditional sources. To the extent our tenants face increased competition from non-traditional competitors, such as internet vendors, their businesses could suffer. There can be no assurance that our tenants will be successful in meeting any new competition, and a deterioration in our tenants’ businesses could impair their ability to meet their lease obligations to us and thereby materially and adversely affect us.

Additionally, we believe that many of the businesses operated by our tenants are benefiting from current favorable macroeconomic trends that support consumer spending, such as strong and growing employment levels, a relatively low interest rate environment and positive consumer sentiment. Economic conditions are generally cyclical, and developments that discourage consumer spending, such as increasing unemployment, wage stagnation, decreases in the value of real estate, inflation or increasing interest rates, could adversely affect our tenants, impair their ability to meet their lease obligations to us and materially and adversely affect us.

Properties occupied by a single tenant pursuant to a single lease subject us to significant risk of tenant default.

Our strategy focuses on owning, operating and investing in single-tenant, net leased commercial properties. Therefore, the financial failure of, or default in payment by, a tenant under its lease is likely to cause a significant or complete reduction in our rental revenue from that property and possibly a reduction in the value of the property. We may also experience difficulty or a significant delay in re-leasing or selling such property. This risk is magnified in situations where we lease multiple properties to a single tenant and the financial failure of the tenant’s business affects more than a single property. A failure or default by such a tenant could reduce or eliminate rental revenue from multiple properties and reduce the value of such properties, which could materially and adversely affect us.

We 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.

A decline in the fair market value of our long-lived assets may require us to recognize an impairment against such assets (as defined by Financial Accounting Standards Board, or the FASB, authoritative accounting guidance) if certain conditions or circumstances related to an asset were to change and we were to determine that, with respect to any such asset, that the cash flows no longer support the carrying value of the asset. The fair value of our long-lived assets depends on market conditions, including estimates of future demand for these assets, and the revenues that can be generated from such assets. If such a determination were to be made, we would recognize the estimated unrealized losses through earnings and write down the depreciated cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be impaired. Such impairment charges reflect non-cash losses at the time of recognition, and subsequent dispositions or sales of such assets could further affect our future losses or gains, as they are based on the difference between the sales price received and the adjusted depreciated cost of such assets at the time of sale.

Our portfolio has geographic market concentrations that make us susceptible to adverse developments in those geographic markets.

In addition to general, regional, national and global economic conditions, our operating performance is impacted by the economic conditions of the specific geographic markets in which we have concentrations of properties. Our initial portfolio includes substantial holdings in the following states as of September 30, 2019 (based on annualized base rent): Oregon, Florida, Georgia, North Carolina, Arizona and Nevada. In addition, a significant portion of our holdings as of that date (based on annualized base rent) was located in the South (55.6%) and West (35.2%) regions of the United States (as defined by the U.S. Census Bureau). Our geographic concentrations could adversely affect our operating performance if conditions become less favorable in any of the states or markets within such states in which we have a concentration of properties. We cannot assure you that any of our markets will grow, not experience adverse developments or that underlying real estate fundamentals will be favorable to owners and operators of commercial properties. Our operations may also be affected if competing properties are built in our markets. A downturn in the economy in the states or regions in which we have a concentration of properties, or markets within such states or regions, could adversely affect our tenants operating businesses in those states or regions, impair their ability to pay rent to us and thereby materially and adversely affect us.

We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us.

As of September 30, 2019, Wells Fargo, N.A., our largest tenant, contributed 25.0% of our annualized base rent. Additionally, we derived 18.2% of our annualized base rent as of September 30, 2019 from our second largest tenant, Hilton Grand Vacations. We have two other tenants, Walgreens and LA Fitness, that contribute approximately 7.9% and 6.8%, respectively, of our annualized base rent as of September 30, 2019. As a result, our financial performance depends significantly on the financial condition of these tenants and, for the tenants operating a retail business at the property, on the revenues generated from these tenants. In the future, we may have additional tenant and property concentrations. In the event that one of these tenants, or another tenant that occupies a significant number of our properties or whose lease payments represent a significant portion of our rental revenue, were to experience financial difficulty or file for bankruptcy, it could have a material adverse effect on us.

Certain 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.

As of September 30, 2019, approximately 61.8% of our tenants or parent entities thereof (based on annualized base rent) were not rated or did not have an investment grade credit rating from a recognized rating agency. Leases with non-investment grade or unrated tenants may be subject to a greater risk of default. Unrated tenants or non-investment grade tenants may also be more likely to experience financial weakness or file for bankruptcy than tenants with investment grade credit ratings. When we consider the acquisition of a property with an in-place lease with an unrated or non-investment grade rated tenant or leasing a property to a tenant that does not have a credit rating or does not have an investment grade rating, we evaluate the strength of the proposed tenant’s business at the property level and at a corporate level, if applicable, and may consider the risk of tenant/company insolvency using internally developed methodologies or assessments provided by third parties. If our evaluation of an unrated or non-investment grade tenant’s creditworthiness is inaccurate, the default or bankruptcy risk related to the tenant may be greater than anticipated. In the event that any of our unrated tenants were to experience financial weakness or file for bankruptcy, it could have a material adverse effect on us.

The decrease in demand for retail space may materially and adversely affect us.

As of September 30, 2019, leases representing approximately 56.8% of the annualized base rent of our initial portfolio were with tenants operating retail businesses. In the future, we intend to acquire additional properties leased to a single tenant operating a retail business at the property. Accordingly, decreases in the demand for leasing retail space may have a greater adverse effect on us than if we had fewer investments in retail properties. The market for leasing of retail space has historically been adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large retail companies, consolidation in the retail industry, the excess amount of retail space in a number of markets and increasing e-commerce pressure. To the extent that adverse conditions arise or continue, they are likely to negatively affect market rents for retail space and could materially and adversely affect us.

We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.

Our results of operations depend on our ability to lease our properties, including renewing expiring leases, leasing vacant space and re-leasing space in properties where leases are expiring. In leasing or re-leasing our properties, we may be unable to optimize our tenant mix or execute leases on more economically favorable terms than the prior in-place lease. Our tenants may decline, or may not have the financial resources available, to renew their leases, and there can be no assurance that leases that are renewed will have terms that are as economically favorable to us as the expiring lease terms. If tenants do not renew their leases as they expire, we will have to source new tenants to lease our properties, and there can be no assurance that we will be able to find new tenants or that our properties will be re-leased at rental rates equal to or above the previous in-place lease or current average rental rates or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to attract new tenants. We may experience increased costs in connection with re-leasing our properties, which could materially and adversely affect us.

Certain provisions of our leases may be unenforceable.

Our rights and obligations with respect to our leases are governed by written agreements. A court could determine that one or more provisions of such an agreement are unenforceable. We

could be adversely impacted if this were to happen with respect to a property or group of properties.

The bankruptcy or insolvency of any of our tenants could result in the termination of such tenant’s lease and material losses to us.

The occurrence of a tenant bankruptcy or insolvency would likely diminish the income we receive from that tenant’s lease or leases or force us to re-tenant a property as a result of a default of the in-place tenant or a rejection of a tenant lease by a bankruptcy court. If a tenant files for bankruptcy or becomes insolvent, federal law may prohibit us from evicting such tenant based solely upon such bankruptcy or insolvency. In addition, a bankrupt or insolvent tenant may be authorized to reject and terminate its lease or leases with us. Any claims against such bankrupt tenant for unpaid rent or future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under the lease or leases. In addition, any claim we have for unpaid past rent, if any, may not be paid in full. We may also be unable to re-lease a property in which the in-place lease was not terminated or rejected or to re-lease it on comparable or more favorable terms. As a result, tenant bankruptcies or insolvencies may materially and adversely affect us.

We may not acquire the properties that we evaluate in our pipeline.

We will generally seek to maintain a robust pipeline of investment opportunities. Transactions may fail to close for a variety of reasons, including the discovery of previously unknown liabilities or other items uncovered during our diligence process. Similarly, we may never execute binding purchase agreements with respect to properties that are currently subject to non-binding letters of intent, and properties with respect to which we are negotiating may never lead to the execution of any letter of intent. For many other reasons, we may not ultimately acquire the properties in our pipeline.

As we continue to acquire properties, we may decrease or fail to increase the diversity of our portfolio.

While we will seek to maintain or increase our portfolio’s tenant, geographic and industry diversification with future acquisitions, it is possible that we may determine to consummate one or more acquisitions that actually decrease our portfolio’s diversity. If our portfolio becomes less diverse, our business will be more sensitive to tenant or market factors, including the bankruptcy or insolvency of tenants, to changes in consumer trends of a particular industry and to a general economic downturn or downturns in a market or particular geographic area.

We may obtain only limited warranties when we acquire a property and may only have limited recourse if our due diligence did not identify any issues that may subject us to unknown liabilities or lower the value of our property, which could adversely affect our financial condition and ability to make distributions to you.

The seller of a property often sells the property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will survive for only a limited period after the closing. The acquisition of, or purchase of, properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, lose rental income from that property or may be subject to unknown liabilities with respect to such properties.

The tenants that occupy our properties compete in industries that depend upon discretionary spending by consumers. A reduction in the willingness or ability of consumers to use their discretionary income in the businesses of our tenants and potential tenants could adversely impact our tenants’ business and thereby adversely impact our ability to collect rents and reduce the demand for leasing our properties.

Certain properties in our portfolio are leased to tenants operating retail, service-oriented or experience-based businesses. Restaurants (including quick service and casual and family dining), home furnishings, entertainment (including movie theaters), sporting goods and health and fitness represent a significant portion of the industries in our portfolio. The success of most of the tenants operating businesses in these industries depends on consumer demand and, more specifically, the willingness of consumers to use their discretionary income to purchase products or services from our tenants. A prolonged period of economic weakness, another downturn in the U.S. economy or accelerated dislocation of these industries due to the impact of e-commerce could cause consumers to reduce their discretionary spending in general or spending at these locations in particular, which could have a material and adverse effect on us.

The vacancy of one or more of our properties could result in us having to incur significant capital expenditures to re-tenant the space.

The loss of a tenant, either through lease expiration or tenant bankruptcy or insolvency, may require us to spend significant amounts of capital to renovate the property before it is suitable for a new tenant and cause us to incur significant costs to source new tenants. In many instances, the leases we enter into or assume through acquisition are for properties that are specifically suited to the particular business of our tenants. Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant. In addition, in the event we decide to sell the property, we may have difficulty selling it to a party other than the tenant due to the special purpose for which the property may have been designed or modified. This potential limitation on our ability to sell a property may limit our ability to quickly modify our portfolio in response to changes in our tenants’ business prospects, economic or other conditions, including tenant demand. These limitations may materially and adversely affect us.

We may be unable to identify and complete acquisitions of suitable properties, which may impede our growth, and our future acquisitions may not yield the returns we expect.

Our ability to expand through acquisitions requires us to identify and complete acquisitions that are consistent with our investment and growth strategy and our investment criteria and to successfully integrate newly acquired properties into our portfolio. Our Manager continually evaluates investment opportunities for us, but our ability to acquire properties on favorable terms and successfully operate them may be constrained by the following significant risks:

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we face competition from other real estate investors with significant capital, including REITs and institutional investment funds, which may be able to accept more risk than we can prudently manage, including risks associated with paying higher acquisition prices;

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we face competition from other potential acquirers which may significantly increase the purchase price for a property we acquire, which could reduce our growth prospects;

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we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are unable to complete;

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we may acquire properties that are not accretive to our results of operations upon acquisition, and we may be unsuccessful in managing and leasing such properties in accordance with our expectations;

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our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition of such property;

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we may discover unexpected issues, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto;

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we may fail to obtain financing for an acquisition on favorable terms or at all;

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we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;

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market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and

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we may acquire properties subject to (i) liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination not revealed in Phase I environmental site assessments or otherwise through due diligence, (ii) claims by tenants, vendors or other persons dealing with the former owners of the properties, (iii) liabilities incurred in the ordinary course of business and (iv) claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

If any of these risks are realized, we may be materially and adversely affected.

We may be unable to complete acquisitions of properties subject to the exclusivity and ROFO agreement between us and CTO, and any completed acquisitions of such properties may not yield the returns we expect.

Upon completion of this offering and the concurrent CTO private placement, we will enter into an exclusivity and ROFO agreement with CTO. See “Certain Relationships and Related Person Transactions—Exclusivity and ROFO Agreement.” Although the exclusivity and ROFO agreement provides us with a right of first offer with respect to certain single-tenant, net leased properties owned by CTO, there can be no assurance that CTO will elect to sell these properties in the future. Even if CTO elects to sell these properties in the future, we may be unable to reach an agreement with CTO on the terms of the purchase of such properties or may not have the funds or ability to finance the purchase of such properties. Accordingly, there can be no assurance that we will be able to acquire any properties subject to the exclusivity and ROFO agreement in the future. Further, even if we are able to acquire properties subject to the exclusivity and ROFO agreement, there is no guarantee that such properties will be able to maintain their historical performance, or that we will be able to realize the same returns from those properties as CTO.

We 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.

We compete with numerous developers, owners and operators of single-tenant, net leased properties, many of which are much larger and own properties similar to ours in the same markets

in which our properties are located. The size and financial wherewithal of our competitors may allow them to offer space at rental rates below current market rates or below the rental rates we charge our tenants. As a result, we may lose existing tenants or fail to obtain future tenants, and the downward pressure caused by these other owners, operators and developers may cause us to reduce our rental rates or to offer more substantial rent abatements, tenant improvements, early termination rights or below-market renewal options in order to retain tenants when our leases expire. Competition for tenants could adversely impact the occupancy levels of our portfolio or prevent increases of the rental rates of our properties, which could materially and adversely affect us.

Inflation may materially and adversely affect us and our tenants.

Increased inflation could have an adverse impact on interest rates, which would likely negatively impact the cost of any variable rate debt that we obtain in the future. During times when inflation is increasing at a greater rate than the increases in rent provided by our leases, our rent levels will not keep up with the costs associated with rising inflation. Increased costs may have an adverse impact on our tenants if increases in their operating expenses exceed increases they might achieve in revenues, which may adversely affect the tenants’ ability to pay rent owed to us.

The redevelopment or renovation of our properties may cause us to experience unexpected costs and have other risks that could materially and adversely affect us.

We may in the future redevelop, significantly renovate or otherwise invest additional capital in our properties to improve them and enhance the opportunity for achieving attractive risk-adjusted returns. These activities are subject to a number of risks, including risks associated with construction work and risks of cost overruns due to construction delays or other factors that may increase the expected costs of a project. In addition, we may incur costs in connection with projects that are ultimately not pursued to completion. Any of our redevelopment or renovation projects may be financed. If such financing is not available on acceptable terms, our redevelopment and renovation activities may not be pursued or may be curtailed. In addition, such activities would likely reduce the available borrowing capacity on the revolving credit facility we expect to have in place upon completion of this offering or any other credit facilities that we may have in place in the future, which would limit our ability to use those sources of capital for the acquisition of properties and other operating needs. The risks associated with redevelopment and renovation activities, including but not necessarily limited to those noted above, could materially and adversely affect us.

Our 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.

The real estate investments made, and expected to be made, by us are relatively difficult for us to sell quickly. As a result, our ability to make rapid adjustments in the size and content of our portfolio in response to economic or other conditions will be limited. Illiquid assets typically experience greater price volatility, as a ready market does not exist, and can be more difficult to value. In addition, validating third party pricing for illiquid assets may be more subjective than more liquid assets. As a result, if we are required to quickly liquidate all or a portion of our portfolio, we may realize significantly less than the value at which we have previously recorded our assets.

In addition, the Code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. In particular, the tax laws applicable to

REITs effectively require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on favorable terms, which may materially and adversely affect us.

We may not be able to dispose of properties we target for sale to recycle our capital.

Although we may seek to selectively sell properties to recycle our capital, we may be unable to sell properties targeted for disposition due to adverse market or other conditions, or not achieve the pricing or timing that is consistent with our expectations. This may adversely affect, among other things, our ability to deploy capital into the acquisition of other properties and the execution of our overall operating strategy, which could, consequently, materially and adversely affect us.

Natural disasters, terrorist attacks, other acts of violence or war or other unexpected events could materially and adversely affect us.

Natural disasters, terrorist attacks, other acts of violence or war or other unexpected events could materially interrupt our business operations (or those of our tenants), cause consumer confidence and spending to decrease or result in increased volatility in the U.S. and worldwide financial markets and economies. They also could result in or prolong an economic recession. Any of these occurrences could materially and adversely affect us.

In addition, our corporate headquarters and certain of our properties are located in Florida, where major hurricanes have occurred. Depending on where any hurricane makes landfall, our properties in Florida could experience significant damage. In addition, the occurrence and frequency of hurricanes in Florida could also negatively impact demand for our properties located in that state because of consumer perceptions of hurricane risks. In addition to hurricanes, the occurrence of other natural disasters and climate conditions in Florida (and in other states where our properties are located), such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts and heat waves, could have an adverse effect on our tenants, which could adversely impact our ability to collect rental revenues. If a hurricane, earthquake, natural disaster or other similar significant disruption occurs, we may experience disruptions to our operations and damage to our properties, which could materially and adversely affect us.

Terrorist attacks or other acts of violence may also negatively affect our operations. There can be no assurance that there will not be terrorist attacks against businesses within the U.S. These attacks may directly impact our physical assets or business operations or the financial condition of our tenants, lenders or other institutions with which we have a relationship. The U.S. may be engaged in armed conflict, which could also have an impact on the tenants, lenders or other institutions with which we have a relationship. The consequences of armed conflict are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business. Any of these occurrences could materially and adversely affect us.

Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.

Our leases typically provide that either the landlord or the tenant will maintain property and liability insurance for the properties that are leased from us. If our tenants are required to carry liability and/or property insurance coverage, our tenants are required to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their liability policies and additional named insured and/or loss payee (or mortgagee, in the case of our

lenders) on their property policies. Depending on the location of the property, losses of a catastrophic nature, such as those caused by hurricanes, earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet. In addition, losses of a catastrophic nature, such as those caused by wind, hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable. In the event there is damage to our properties that is not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged.

Inflation, changes in building codes and ordinances, environmental considerations and other factors, including terrorism or acts of war, may make any insurance proceeds we receive insufficient to repair or replace a property if it is damaged or destroyed. In those circumstances, the insurance proceeds received may not be adequate to restore our economic position with respect to the affected real property and its generation of rental revenue. Furthermore, in the event we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications without significant capital expenditures which may exceed any amounts received pursuant to insurance policies, as reconstruction or improvement of such a property would likely require significant upgrades to meet zoning and building code requirements. The loss of our capital investment in or anticipated future returns from our properties due to material uninsured losses could materially and adversely affect us.

We are highly dependent on information systems and certain third-party technology service providers, and systems failures not related to cyber-attacks or similar external attacks could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and adversely impact our results of operations and cash flows.

Our business is highly dependent on communications and information systems and networks. Any failure or interruption of these systems or networks could cause delays or other problems in our operations and communications. Through our relationship with CTO and our Manager, we rely heavily on CTO’s financial, accounting and other data processing systems. In addition, much of the information technology infrastructure on which we rely is or may be managed by third parties and, as such, we also face the risk of operational failure, termination or capacity constraints by any of these third parties. It is difficult to determine what, if any, negative impact may directly result from any specific interruption or disruption of the networks or systems on which our business relies or any failure to maintain performance, reliability and security of our technological infrastructure, but significant events impacting the systems or networks on which our business relies could materially and adversely affect us.

Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.

Cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation and reputational damage. Should any such cyber incidents or similar events occur, our assets, particularly cash, could be lost and, as a result, our ability to execute our business and pursue our investment and growth strategy could be impaired, thereby materially and adversely affecting us.

We are newly formed, have no operating history as a REIT or a publicly traded company and have limited resources, and as such may not be able to successfully operate our business, continue to implement our investment strategy or generate sufficient revenue to make or sustain distributions to stockholders. We cannot assure you that the past experience of our senior management team will be sufficient to successfully operate our company as a publicly traded company.

We are newly formed and have no operating history as a REIT or a publicly traded company. There can be no assurance that the past experience of our senior management team will be sufficient to successfully operate our company as a REIT or a publicly traded company, including the ability to timely meet the ongoing disclosure requirements of the SEC. See “—Risks Related to Our Qualification and Operation as a REIT—Failure to qualify as a REIT, or failure 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.” Following completion of this offering, we will be required to develop and implement control systems and procedures in order to qualify and maintain our qualification as a REIT and satisfy our periodic and current reporting requirements under applicable SEC regulations and comply with NYSE listing standards, and this transition could place a significant strain on our management systems, infrastructure and other resources and divert management’s attention from growing our business. Failure to operate successfully as a public company could materially and adversely affect us.

In addition, our limited resources may materially and adversely impact our ability to successfully manage and operate our portfolio or implement our business plan. Should we be unsuccessful in operating our business or implementing our investment strategy, we may not be able to generate sufficient revenue to make or sustain distributions to stockholders, the value of your investment could decline significantly or you could lose a portion of or all of your investment in us.

Upon completion of this offering, our senior management team will be 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.

Upon completion of this offering, our senior management team will be required to operate two publicly traded companies, CTO and our company, and will be required to comply with periodic and current reporting requirements under applicable SEC regulations and comply with applicable listing standards of the NYSE and the NYSE American. This could place a significant strain on our senior management team and the management systems, infrastructure and other resources of CTO on which we rely. There can be no assurance that our senior management team will be able to successfully operate two publicly traded companies. Any failure by our senior management team to successfully operate our company or CTO could materially and adversely affect us.

We may become subject to litigation, which could materially and adversely affect us.

We may become subject to litigation, including claims relating to this offering, our operations, other securities offerings and otherwise in the ordinary course of business. Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against. We generally intend to vigorously defend ourselves. However, we cannot be certain of the ultimate outcomes of any claims that may arise in the future and which are presently not known to us. Resolution of these types of matters against us may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could materially and adversely impact

our earnings and cash flows, thereby materially and adversely affecting us. Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could materially and adversely impact us, expose us to increased risks that would be uninsured and materially and adversely impact our ability to attract directors and officers.

If 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.

As a publicly-traded company, we will be required to report our financial statements on a consolidated basis. Effective internal controls are necessary for us to accurately report our financial results. Section 404 of the Sarbanes-Oxley Act will require us to evaluate and report on our internal control over financial reporting. However, for as long as we are an “emerging growth company” under the JOBS Act,our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. There can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Furthermore, as we grow our business, our internal controls will become more complex, and we may require significantly more resources to ensure our internal controls remain effective. Future deficiencies, including any material weakness, in our internal control over financial reporting which may occur could result in misstatements of our results of operations that could require a restatement, failing to meet our public company reporting obligations and causing investors to lose confidence in our reported financial information, which could materially and adversely affect us.

If 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.

Upon completion of this offering, we will become subject to the informational requirements of the Exchange Act and will be required to file reports and other information with the SEC. As a publicly-traded company, we will be required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with, or submit to, the SEC is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. They include controls and procedures designed to ensure that information required to be disclosed in reports filed with, or submitted to, the SEC is accumulated and communicated to management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure. Effective disclosure controls and procedures are necessary for us to provide reliable reports, effectively prevent and detect fraud and to operate successfully as a public company. Designing and implementing effective disclosure controls and procedures is a continuous effort that requires significant resources and devotion of time. We may discover deficiencies in our disclosure controls and procedures that may be difficult or time consuming to remediate in a timely manner. Any failure to maintain effective disclosure controls and procedures or to timely effect any necessary improvements thereto could cause us to fail to meet our reporting obligations (which could affect the listing of our common stock on the NYSE). Additionally, ineffective disclosure controls and procedures could also adversely affect our ability to prevent or detect fraud, harm our reputation and cause investors to lose confidence in our reports filed with, or submitted to, the SEC, which would likely have a negative effect on the trading price of our common stock.

The historical combined financial statements of Alpine Income Property Trust Predecessor and our unaudited pro forma consolidated financial statements may not be representative of our financial statements as an independent public company.

The historical combined financial statements of Alpine Income Property Trust Predecessor and our unaudited pro forma consolidated financial statements that are included in this prospectus do not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent public company during the periods presented. Furthermore, this financial information is not necessarily indicative of what our results of operations, financial position or cash flows will be in the future. It is impossible for us to accurately estimate all adjustments which may reflect all of the significant changes that will occur in our cost structure, funding and operations as a result of this offering and becoming a public company. For additional information, see “Selected Historical and Pro Forma Financial and Other Data” and the historical combined financial statements of Alpine Income Property Trust Predecessor and our unaudited pro forma consolidated financial statements, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in this prospectus.

The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us.

The ownership of our properties may subject us to known and unknown environmental liabilities. Under various federal, state and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from environmental matters, including the presence or discharge of hazardous or toxic substances, waste or petroleum products at, on, in, under or migrating from such property, as well as costs to investigate or clean up such contamination and liability for personal injury, property damage or harm to natural resources. We may face liability regardless of:

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our knowledge of the contamination;

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the timing of the contamination;

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the cause of the contamination; or

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the party responsible for the contamination of the property.

There may be environmental liabilities associated with our properties of which we are unaware. With respect to each of the properties in our initial portfolio, CTO has obtained Phase I environmental site assessments. We will obtain Phase I environmental assessments on all properties we acquire after the completion of this offering. Phase I environmental site assessments are limited in scope and therefore may not reveal all environmental conditions affecting a property. Therefore, there could be undiscovered environmental liabilities on the properties we own. Some of our properties use, or may have used in the past, underground tanks for the storage of petroleum-based products or waste products that could create a potential for release of hazardous substances or penalties if tanks do not comply with legal standards. If environmental contamination exists on our properties, we could be subject to strict, joint and/or several liability for the contamination by virtue of our ownership interest. Some of our properties may contain asbestos-containing materials, or ACM. Environmental laws govern the presence, maintenance and removal of ACM and such laws may impose fines, penalties or other obligations for failure to comply with these requirements or expose us to third-party liability (for example, liability for personal injury associated with exposure to asbestos). Environmental laws also apply to other

activities that can occur on a property, such as storage of petroleum products or other hazardous toxic substances, air emissions, water discharges and exposure to lead-based paint. Such laws may impose fines and penalties for violations and may require permits or other governmental approvals to be obtained for the operation of a business involving such activities.

The known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. In addition, environmental laws may create liens on contaminated properties in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used or businesses may be operated, and these restrictions may require substantial expenditures.

In addition, although our leases generally require our tenants to operate in compliance with all applicable laws and to indemnify us against any environmental liabilities arising from a tenant’s activities on the property, we could be subject to strict liability by virtue of our ownership interest. We cannot be sure that our tenants will, or will be able to, satisfy their indemnification obligations, if any, under our leases. Furthermore, the discovery of environmental liabilities on any of our properties could lead to significant remediation costs or to other liabilities or obligations attributable to the tenant of that property or could result in material interference with the ability of our tenants to operate their businesses as currently operated. Noncompliance with environmental laws or discovery of environmental liabilities could each individually or collectively affect such tenant’s ability to make payments to us, including rental payments and, where applicable, indemnification payments.

Our environmental liabilities may include property and natural resources damage, personal injury, investigation and clean-up costs, among other potential environmental liabilities. These costs could be substantial. Although we may obtain insurance for environmental liability for certain properties that are deemed to warrant coverage, our insurance may be insufficient to address any particular environmental situation and we may be unable to continue to obtain insurance for environmental matters, at a reasonable cost or at all, in the future. If our environmental liability insurance is inadequate, we may become subject to material losses for environmental liabilities. Our ability to receive the benefits of any environmental liability insurance policy will depend on the financial stability of our insurance company and the position it takes with respect to our insurance policies. If we were to become subject to significant environmental liabilities, we could be materially and adversely affected.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediation.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, should our tenants or their employees or customers be exposed to mold at any of our properties, we could be required to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, exposure to mold by our tenants or others could subject us to liability if property damage or health concerns arise. If we were to become subject to significant mold-related liabilities, we could be materially and adversely affected.

Our 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.

In recent years, the assessment of the potential impact of climate change has begun to impact the activities of government authorities, the pattern of consumer behavior and other areas that impact the business environment in the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices. The promulgation of policies, laws or regulations relating to climate change by governmental authorities in the U.S. and the markets in which we own properties may require us to invest additional capital in our properties. In addition, the impact of climate change on businesses operated by our tenants is not reasonably determinable at this time. While not generally known at this time, climate change may impact weather patterns or the occurrence of significant weather events which could impact economic activity or the value of our properties in specific markets. The occurrence of any of these events or conditions may adversely impact our ability to lease our properties, which would materially and adversely affect us.

Compliance 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.

Our properties will be subject to the Americans with Disabilities Act, or the ADA. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While our tenants will be obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected. We could be required to expend our own funds to comply with the provisions of the ADA, which could materially and adversely affect us.

In addition, we will be required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements and may be required to obtain approvals from various authorities with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Additionally, failure to comply with any of these requirements could result in the imposition of fines by governmental authorities or awards of damages to private litigants. While we intend to only acquire properties that we believe are currently in substantial compliance with all regulatory requirements, these requirements may change and new requirements may be imposed which would require significant unanticipated expenditures by us and could materially and adversely affect us.

Changes in accounting standards may materially and adversely affect us.

From time to time, the FASB and the SEC, who create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that will govern the preparation of our financial statements. These changes could materially and adversely affect our reported financial condition and results of

operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate.

We have not obtained any third-party appraisals of the properties to be acquired by us from CTO in connection with the formation transactions. Accordingly, the value of the cash and OP units to be paid or issued as consideration for the properties to be acquired by us in the formation transactions may exceed the aggregate fair market value of such properties.

We have not obtained any third-party appraisals of the properties to be acquired by us from CTO in connection with the formation transactions. The value of the OP units that we will issue as partial consideration for the properties that we will acquire in the formation transactions will increase or decrease if the price per share of our common stock in this offering is above or below the mid-point of the price range set forth on the front cover of this prospectus. The price per share of our common stock in this offering does not necessarily bear any relationship to the book value or the fair market value of the properties to be acquired by us from CTO in connection with the formation transactions. Accordingly, the value of the cash and OP units to be paid or issued as consideration for the properties to be acquired by us in the formation transactions may exceed the aggregate fair market value of such properties.

In the future, we may 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.

In the future, we may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for common or preferred units of limited partnership interest in our Operating Partnership, which may result in stockholder dilution. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to protect the contributors’ ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions.

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

We have no employees and will be 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.

Because we are “externally managed,” we will not employ our own personnel, but will instead depend upon CTO, our Manager and their affiliates for virtually all of the services we require. Our Manager selects and manages the acquisition of properties that meet our investment criteria; administers the collection of rents, monitors lease compliance by our tenants and deals with vacancies and re-letting of our properties; coordinates the sale of our properties; provides financial and regulatory reporting services; communicates with our stockholders, causes us to pay distributions to our stockholders and arranges for transfer agent services; and provides all of our other administrative services. Accordingly, our success is largely dependent upon the expertise and services of the executive officers and other personnel of CTO provided to us through our Manager.

CTO may be unable to obtain or retain the executive officers and other personnel that it provides to us through our Manager.

Our success depends to a significant degree upon the executive officers and other personnel of CTO that it provides to us through our Manager. In particular, we rely on the services of John P. Albright, President and Chief Executive Officer of our company and CTO and a member of the board of directors of our company and CTO, Mark E. Patten, Senior Vice President, Chief Financial Officer and Treasurer of our company and CTO, Steven R. Greathouse, Senior Vice President, Investments of our company and CTO and Daniel E. Smith, Senior Vice President, General Counsel and Corporate Secretary of our company and CTO. In addition to these executive officers, we also rely on other personnel of CTO that are provided to us through our Manager. We cannot guarantee that all, or any particular one of these executive officers and other personnel of CTO provided to us through our Manager, will remain affiliated with CTO, our Manager and us. We do not separately maintain key person life insurance on any person. Failure by CTO to retain any of its executive officers and other personnel provided to us through our Manager and to hire and retain additional highly skilled managerial, operational and marketing personnel could have a material adverse effect on our ability to achieve our investment growth objectives and could result in us incurring excess costs and suffering deficiencies in our disclosure controls and procedures or our internal control over financial reporting.

We pay substantial fees and expenses to our Manager, which payments increase the risk that you will not earn a profit on your investment.

Pursuant to the management agreement, we pay significant fees to our Manager. Those fees include a base management fee, an incentive fee and obligations to reimburse our Manager for certain expenses. These payments increase the risk that you will not earn a profit on your investment.

The 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.

We pay our Manager a base management fee pursuant to the management agreement, which may be substantial, based on our “total equity” (as defined in the management agreement) regardless of the performance of our portfolio of properties. Our Manager’s entitlement to non-performance-based compensation might reduce its incentive to seek profitable investment opportunities for us, which could result in a lower performance of our portfolio and materially adversely affect us.

The 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.

Our Manager has the ability to earn incentive fees based on our total stockholder return exceeding an 8% cumulative annual hurdle rate, which may create an incentive for our Manager to invest in properties with a purchase price reflecting a higher potential yield, that may be riskier or more speculative, or sell an investment prematurely for a gain, in an effort to increase our short-term gains and thereby increase our stock price and the incentive fees to which it is entitled. If our interests and those of our Manager are not aligned, the execution of our business plan and our results of operations could be adversely affected, which could materially and adversely affect the market price of our common stock and our ability to make distributions to our stockholders.

There are conflicts of interest in our relationships with our Manager, which could result in outcomes that are not in our best interests.

We are subject to conflicts of interest arising out of our relationships with our Manager. Pursuant to the management agreement, our Manager is obligated to supply us with our management team. However, our Manager is not obligated to dedicate any specific personnel exclusively to us, nor are the CTO personnel provided to us by our Manager obligated to dedicate any specific portion of their time to the management of our business. Additionally, our Manager is a wholly-owned subsidiary of CTO. All of our executive officers are executive officers and employees of CTO and one of our executive officers (John P. Albright) is also a member of the board of directors of our company and the board of directors of CTO. As a result, our Manager and the CTO personnel it provides to us, including our executive officers, may have conflicts between their duties to us and their duties to CTO.

In addition to our initial portfolio, we may acquire or sell properties in which CTO or its affiliates have or may have an interest. Similarly, CTO or its affiliates may acquire or sell properties in which we have or may have an interest. Although such acquisitions or dispositions may present conflicts of interest, we nonetheless may pursue and consummate such transactions. Additionally, we may engage in transactions directly with CTO, our Manager or their affiliates. If we acquire a property from CTO or one of its affiliates or sell a property to CTO or one of its affiliates, the purchase price we pay to CTO or one of its affiliates or the purchase price paid to us by CTO or one of its affiliates may be higher or lower, respectively, than the purchase price that would have been paid to or by us if the transaction were the result of arms’ length negotiations with an unaffiliated third party.

In deciding whether to issue additional debt or equity securities, we will rely in part on recommendations made by our Manager. While such decisions are subject to the approval of our board of directors, our Manager is entitled to be paid a base management fee that is based on our “total equity” (as defined in the management agreement). As a result, our Manager may have an incentive to recommend that we issue additional equity securities at dilutive prices. If we issue additional equity securities at dilutive prices, the market price of our common stock may be adversely affected and you could lose some or all of your investment in our common stock.

Our 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.

Our ability to achieve our objectives depends on, among other things, our Manager’s ability to identify, acquire and lease properties that meet our investment criteria. Accomplishing our objectives is largely a function of our Manager’s structuring of our investment process, our access to financing on acceptable terms and general market conditions. Our stockholders will not have input into our investment decisions. All of these factors increase the uncertainty, and thus the risk,

of investing in our common stock. The CTO executive officers and other CTO personnel provided to us through our Manager have substantial responsibilities under the management agreement. In order to implement certain strategies, CTO, our Manager or their affiliates may need to hire, train, supervise and manage new employees successfully. Any failure by CTO or our Manager to manage our future growth effectively could have a material adverse effect on us, our ability to qualify and maintain our qualification as a REIT and our ability to make distributions to our stockholders.

Pursuant to the management agreement, our Manager will not assume any responsibility other than to render the services called for thereunder and will not be responsible for any action of our board of directors in following or declining to follow its directives. Our Manager maintains a contractual, as opposed to a fiduciary relationship, with us. Under the terms of the management agreement, our Manager, its officers, members and personnel, any person controlling or controlled by our Manager and any person providing sub-advisory services to our Manager will not be liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary’s stockholders or partners for acts or omissions performed in accordance with 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.

In addition, we have agreed to indemnify our Manager and each of its officers, directors, members, managers and employees from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf pursuant to authority granted by the management agreement, except where attributable to gross negligence, willful misconduct, bad faith or reckless disregard of such person’s duties under the management agreement. As a result, we could experience unfavorable operating results or incur losses for which our Manager would not be liable.

Termination 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.

If we fail to renew the management agreement, or terminate the agreement, other than for a termination for cause, we will be obligated to pay our Manager a termination fee equal to three times the sum of (i) the average annual base management fee earned by our Manager during the 24-month period immediately preceding the most recently completed calendar quarter prior to the termination date and (ii) the average annual incentive fee earned by our Manager during the two most recently completed measurement periods (as defined in the management agreement) prior to the termination date. Such a payment would likely be a substantial one-time charge that could render unattractive, or not economically feasible, the termination of our Manager, even if it performed poorly. In addition, any termination of the management agreement would end our Manager’s obligation to provide us with our executive officers and personnel upon whom we rely for the operation of our business and would also terminate our rights under the exclusivity and ROFO agreement with CTO, as discussed further herein. As a result of termination of the exclusivity and ROFO agreement, we would face increased competition from CTO and its affiliates, as well as others, for the acquisition of properties that meet our investment criteria, and our right to acquire certain properties from CTO and its affiliates would be terminated. As a result, the termination of the management agreement could materially and adversely affect us.

If our Manager ceases to be our manager pursuant to the management agreement, counterparties to our agreements may cease doing business with us.

If our Manager ceases to be our manager, it could constitute an event of default or early termination event under financing and other agreements we may enter into in the future, upon which our counterparties may have the right to terminate their agreements with us. If our Manager ceases to be our manager for any reason, including upon the non-renewal of the management agreement, our business and our ability to make distributions to our stockholders may be materially adversely affected.

The management agreement with our Manager and the exclusivity and ROFO agreement with CTO were negotiated between related parties and before our independent directors were elected, and their terms, including the fees payable to our Manager, may not be as favorable to us as if they had been negotiated with unaffiliated third parties. The terms of these agreements may not reflect our long-term best interests and may be overly favorable to CTO, our Manager and their affiliates (other than us and our subsidiaries). Further, we may choose not to enforce, or to enforce less vigorously, our rights under the management agreement and the exclusivity and ROFO agreement because of our desire to maintain our ongoing relationships with our Manager and CTO.

Risks Related to Our Financing Activities

Our 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.

In order to qualify and maintain our qualification as a REIT, we will be required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we will be subject to income tax at the U.S. federal corporate income tax rate to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gain. Because of these distribution requirements, we may not have sufficient liquidity from our operating cash flows to fund future capital needs, including any acquisition financing. Consequently, we may rely on third-party sources, including lenders, to fund our capital needs. We may not be able to obtain debt financing on favorable terms or at all. Any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on:

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general market conditions;

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the market’s perception of our growth potential;

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our current debt levels;

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our current and expected future earnings;

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our cash flow and cash distributions; and

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the market price per share of our common stock.

If we cannot obtain capital from third-party sources, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT, which would materially and adversely affect us.

Our 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.

Concurrently with the closing of this offering, the concurrent CTO private placement and the formation transactions, we anticipate entering into the revolving credit facility and, in the future, we may incur additional indebtedness to finance future acquisitions and redevelopment and renovation projects and for general corporate purposes. There are no restrictions in our charter or bylaws that limit the amount or percentage of indebtedness that we may incur nor restrict the form in which our indebtedness will be incurred (including recourse or non-recourse debt or cross-collateralized debt).

A substantial level of indebtedness in the future could have adverse consequences for our business and otherwise materially and adversely affect us because it could, among other things:

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require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, capital expenditures and other general corporate purposes, including to pay dividends on our common stock as currently contemplated or necessary to satisfy the requirements for qualification as a REIT;

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increase our vulnerability to general adverse economic and industry conditions and limit our flexibility in planning for, or reacting to, changes in our business and our industry;

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limit our ability to borrow additional funds or refinance indebtedness on favorable terms or at all to expand our business or ease liquidity constraints; and

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place us at a competitive disadvantage relative to competitors that have less indebtedness.

The agreements governing our indebtedness are likely to place restrictions on us and our subsidiaries, reducing our operational flexibility and creating risks associated with default and noncompliance.

The agreements governing our anticipated revolving credit facility and other indebtedness that we may incur in the future contain or may contain covenants that place restrictions on us and our subsidiaries. These covenants may restrict, among other activities, our and our subsidiaries’ ability to:

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merge, consolidate or transfer all or substantially all of our or our subsidiaries’ assets;

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sell, transfer, pledge or encumber our stock or the ownership interests of our subsidiaries;

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incur additional debt or issue preferred stock;

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make certain investments;

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make certain expenditures, including capital expenditures;

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pay dividends on or repurchase our capital stock; and

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enter into certain transactions with affiliates.

These covenants could impair our ability to grow our business, take advantage of attractive business opportunities or successfully compete. Our ability to comply with financial and other covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions. A breach of any of these covenants or covenants under any other agreements governing our indebtedness could result in an event of default. Any cross-default provisions in our debt agreements could cause an event of default under one debt agreement to trigger an event of default under our other debt agreements. Upon the occurrence of an event of default under any of our debt agreements, our lenders could elect to declare all outstanding debt under such agreements to be immediately due and payable. If we were unable to repay or refinance the accelerated debt, our lenders could proceed against any assets pledged to secure that debt, including foreclosing on or requiring the sale of any properties securing that debt, and the proceeds from the sale of these properties may not be sufficient to repay such debt in full.

Mortgage 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.

Future borrowings may be secured by mortgages on our properties. Incurring mortgage and other secured debt obligations increases our risk of losses because defaults on secured indebtedness may result in foreclosure actions initiated by lenders and ultimately our loss of the properties securing any loans for which we are in default. If we are in default under a cross-defaulted mortgage loan, we could lose multiple properties to foreclosure. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. As we execute our business plan, we may assume or incur new mortgage indebtedness on our properties. Any default under any mortgage debt obligation we incur may increase the risk of our default on our other indebtedness, including indebtedness under our anticipated revolving credit facility, which could materially and adversely affect us.

An increase in interest rates would increase our interest costs on our variable rate debt and could adversely impact our ability to refinance existing debt or sell assets.

Future borrowings under our anticipated revolving credit facility will bear interest at variable rates. An increase in interest rates would increase our interest payments and reduce our cash flow available for other corporate purposes. In addition, rising interest rates could limit our ability to refinance debt when it matures and increase interest costs on any debt that is refinanced. Further, an increase in interest rates could increase the cost of financing, thereby decreasing the amount third parties are willing to pay for our properties, which would limit our ability to dispose of properties when necessary or desired.

In addition, we may enter into hedging arrangements in the future. Our hedging arrangements may include interest rate swaps, caps, floors and other interest rate hedging contracts. Our hedging arrangements could reduce, but may not eliminate, the impact of rising interest rates, and they could expose us to the risk that other parties to our hedging arrangements will not perform or that the agreements relating to our hedges may not be enforceable.

Changes in the method pursuant to which LIBOR is determined and potential phasing out of LIBOR after 2021 may affect our financial results.

The chief executive of the United Kingdom Financial Conduct Authority, or the FCA, which regulates LIBOR, has recently announced that the FCA intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. It is not possible to predict the effect of these changes, other reforms or the establishment of alternative reference rates in the United Kingdom or elsewhere. Furthermore, in the United States, efforts to identify a set of alternative U.S. dollar reference interest rates include proposals by the Alternative Reference Rates Committee of the Federal Reserve Board and the Federal Reserve Bank of New York. The U.S. Federal Reserve, in conjunction with the Alternative Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate, or SOFR, a new index calculated by short-term repurchase agreements, backed by Treasury securities. The Federal Reserve Bank of New York began publishing SOFR rates in 2018. The market transition away from LIBOR and towards SOFR is expected to be gradual and complicated. There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate and SOFR a secured lending rate, and SOFR is an overnight rate and LIBOR reflects term rates at different maturities. These and other differences create the potential for basis risk between the two rates. The impact of any basis risk between LIBOR and SOFR may negatively affect our operating results. Any of these alternative methods may result in interest rates that are higher than if LIBOR were available in its current form, which could have a material adverse effect on results.

Any changes announced by the FCA, including the FCA Announcement, other regulators or any other successor governance or oversight body, or future changes adopted by such body, in the method pursuant to which the LIBOR rates are determined may result in a sudden or prolonged increase or decrease in the reported LIBOR rates. If that were to occur, the level of interest payments we incur may change. In addition, although certain of our LIBOR based obligations provide for alternative methods of calculating the interest rate payable on certain of our obligations if LIBOR is not reported, which include requesting certain rates from major reference banks in London or New York, or alternatively using LIBOR for the immediately preceding interest period or using the initial interest rate, as applicable, uncertainty as to the extent and manner of future changes may result in interest rates and/or payments that are higher than, lower than or that do not otherwise correlate over time with the interest rates and/or payments that would have been made on our obligations if LIBOR rate was available in its current form.

We may not be able to obtain a revolving credit facility on the indicative terms described in this prospectus or at all.

As described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Anticipated $100 Million Revolving Credit Facility,” we intend to enter into a $100 million unsecured revolving credit facility concurrently with the completion of this offering, the concurrent CTO private placement and the formation transactions. Although we have obtained commitments for the anticipated revolving credit facility, our ability to obtain the credit facility remains subject to satisfaction of the lenders’ due diligence, the negotiation of a definitive credit agreement and other customary closing conditions. These efforts are ongoing, and we may not succeed in obtaining the anticipated revolving credit facility on the indicated terms or at all. Our failure to obtain this credit facility could adversely affect our ability to grow our business and meet our obligations as they come due.

Risks Related to Our Organization and Structure

We are a holding company with no direct operations, and we will rely on funds received from our Operating Partnership to pay our obligations and make distributions to our stockholders.

We are a holding company and will conduct substantially all of our operations through our Operating Partnership. We will not have, apart from an interest in our Operating Partnership, any independent operations. As a result, we will rely on distributions from our Operating Partnership to make any distributions we declare on shares of our common stock. We will also rely on distributions from our Operating Partnership to meet any of our obligations, including any tax liability on taxable income allocated to us from our Operating Partnership. In addition, because we will be a holding company, your claims as stockholders will be structurally subordinated to all existing and future creditors and preferred equity holders of our Operating Partnership and its subsidiaries. Therefore, in the event of a bankruptcy, insolvency, liquidation or reorganization of our Operating Partnership or its subsidiaries, assets of our Operating Partnership or the applicable subsidiary will be available to satisfy our claims to us as an equity owner therein only after all of their liabilities and preferred equity have been paid in full.

After giving effect to this offering, the concurrent CTO private placement and the formation transactions, we will own 86.6% of the OP units. However, in connection with our future acquisition activities or otherwise, we may issue additional OP units to third parties. Such issuances would reduce our ownership in our Operating Partnership. Because you will not directly own units of our Operating Partnership, you will not have any voting rights with respect to any such issuances or other partnership level activities of our Operating Partnership.

Certain provisions of Maryland law could inhibit changes in control of our company.

Certain “business combination” and “control share acquisition” provisions of the Maryland General Corporation Law, or the MGCL, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock. Pursuant to the MGCL, our board of directors has by resolution exempted business combinations between us and any other person. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. However, there can be no assurance that these exemptions will not be amended or eliminated at any time in the future. Our charter and bylaws and Maryland law also contain other provisions that may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws—Removal of Directors,” “—Control Share Acquisitions” and “—Advance Notice of Director Nominations and New Business.”

Certain provisions in the partnership agreement of our Operating Partnership may delay, defer or prevent unsolicited acquisitions of us.

Provisions in the partnership agreement of our Operating Partnership may delay, defer or prevent unsolicited acquisitions of us or changes of our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders might consider such proposals, if made, desirable. These provisions include, among others:

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redemption rights of qualifying parties;

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transfer restrictions on OP units;

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our ability, as general partner, in some cases, to amend the partnership agreement and to cause the Operating Partnership to issue units with terms that could delay, defer or prevent a merger or other change of control of us or our Operating Partnership without the consent of the limited partners; and

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the right of the limited partners to consent to transfers of the general partnership interest and mergers or other transactions involving us under specified circumstances.

The partnership agreement of our Operating Partnership and Delaware law also contain other provisions that may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest. See “Description of the Partnership Agreement of Alpine Income Property OP, LP.”

Our charter contains stock ownership limits, which may delay, defer or prevent a change of control.

In order for us to qualify and maintain our qualification as a REIT for each taxable year commencing with our taxable year ending December 31, 2020, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals during the last half of any calendar year, and at least 100 persons must beneficially own our stock during at least 335 days of a taxable year of 12 months or during a proportionate portion of a shorter taxable year. “Individuals” for this purpose include natural persons, private foundations, some employee benefit plans and trusts and some charitable trusts. To assist us in complying with these limitations, among other purposes, our charter generally prohibits any person from directly or indirectly owning more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock. These ownership limitations could have the effect of discouraging a takeover or other transaction in which holders of our common stock might receive a premium for their shares over the then prevailing market price or which holders might believe to be otherwise in their best interests. For further details regarding stock ownership limits, see “Description of Capital Stock—Restrictions on Ownership and Transfer.”

Our charter’s constructive ownership rules are complex and may cause the outstanding shares owned by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than these percentages of the outstanding shares by an individual or entity could cause that individual or entity to own constructively in excess of these percentages of the outstanding shares and thus violate the share ownership limits. Our charter also provides that any attempt to own or transfer shares of our common stock or preferred stock (if and when issued) in excess of the stock ownership limits without the consent of our board of directors or in a manner that would cause us to be “closely held” under Section 856(h) of the Code (without regard to whether the shares are held during the last half of a taxable year) will result in the shares being automatically transferred to a trustee for a charitable trust or, if the transfer to the charitable trust is not automatically effective to prevent a violation of the share ownership limits or the restrictions on ownership and transfer of our shares, any such transfer of our shares will be null and void.

Our board of directors may change our strategies, policies or procedures without stockholder consent, which may subject us to different and more significant risks in the future.

Our investment, financing, leverage and distribution policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, will be determined by

our board of directors. These policies may be amended or revised at any time and from time to time at the discretion of the board of directors without notice to or a vote of our stockholders. This could result in us conducting operational matters, making investments or pursuing different business or growth strategies than those contemplated in this prospectus. Under these circumstances, we may expose ourselves to different and more significant risks in the future, which could have a material adverse effect on our business and growth. In addition, our board of directors may change our policies with respect to conflicts of interest, provided that such changes are consistent with applicable legal requirements.

We may assume unknown liabilities in connection with the formation transactions, which, if significant, could materially and adversely affect us.

As part of the formation transactions, we will acquire our initial portfolio from CTO, subject to existing liabilities, some of which may be unknown at the time this offering is consummated. Unknown liabilities might include claims of tenants, vendors or other persons dealing with such entities prior to this offering (that had not been asserted or threatened prior to this offering), tax liabilities and accrued but unpaid liabilities incurred in the ordinary course of business. Any unknown or unquantifiable liabilities that we assume in connection with the formation transactions for which we have no or limited recourse could materially and adversely affect us. See “—Risks Related to Our Business and Properties—The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us.” as to the possibility of environmental conditions potentially affecting us.

Our 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.

Our charter limits the liability of our present and former directors and executive officers to us and our stockholders for money damages to the maximum extent permitted under Maryland law. Under current Maryland law, our present and former directors and executive officers will not have any liability to us or our stockholders for money damages other than liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or (ii) active and deliberate dishonesty by the director or executive officer that was established by a final judgment and is material to the cause of action. As a result, we and our stockholders have limited rights against our present and former directors and executive officers, which could limit your recourse in the event of actions not in your best interest. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws—Limitation of Liability and Indemnification of Directors and Officers.”

Conflicts 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.

Conflicts of interest exist or could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our Operating Partnership or any partner thereof, on the other. Our directors and executive officers have duties to our company under applicable Maryland law in connection with their management of our company. At the same time, our wholly-owned subsidiary, Alpine Income Property GP, LLC, as the general partner of our Operating Partnership, has fiduciary duties and obligations to our Operating Partnership and its limited partners under Delaware law and the partnership agreement of our Operating Partnership in connection with the management of our Operating Partnership. The fiduciary duties and obligations of the general partner to our Operating Partnership and its partners may come into conflict with the duties of our directors and executive officers to our company. Our Operating Partnership agreement provides

that, in the event of a conflict between the interests of our stockholders on the one hand, and the limited partners of our Operating Partnership on the other hand, the general partner will endeavor in good faith to resolve the conflict in a manner not adverse to either our stockholders or the limited partners, provided however, that so long as we own a controlling interest in our Operating Partnership, any such conflict that the general partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either our stockholders or the limited partners of our Operating Partnership will be resolved in favor of our stockholders, and the general partner will not be liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by the limited partners in connection with such decisions.

In addition, to the extent permitted by applicable law, the partnership agreement will provide for the indemnification of the general partner and our officers, directors, employees and any other persons the general partner may designate from and against any and all claims that relate to the operations of our Operating Partnership as set forth in the partnership agreement in which any indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that:

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the act or omission of the indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty;

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the indemnitee actually received an improper personal benefit in money, property or services; or

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in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful.

Similarly, the general partner of our Operating Partnership and our officers, directors, agents or employees, will not be liable for monetary damages to our Operating Partnership or the limited partners for losses sustained or liabilities incurred as a result of errors in judgment or mistakes of fact or law or of any act or omission so long as any such party acted in good faith.

We 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 common stock.

Our board of directors, without stockholder approval, has the power under our charter to amend our charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue, to authorize us to issue authorized but unissued shares of our common stock or preferred stock and to classify or reclassify any unissued shares of our common stock or preferred stock into one or more classes or series of stock and set the terms of such newly classified or reclassified shares. See “Description of Capital Stock—Common Stock,” “—Preferred Stock” and “—Power to Issue Additional Shares of Common Stock and Preferred Stock.” As a result, we may issue series or classes of common stock or preferred stock with preferences, distributions, powers and rights, voting or otherwise, that are senior to the rights of holders of our common stock. Any such issuance could dilute our existing common stockholders’ interests. Although our board of directors has no such intention at the present time, it could establish a class or series of preferred stock that could, depending on the terms of such series, delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.

Our Operating Partnership may issue additional OP units without the consent of our stockholders, which could have a dilutive effect on our stockholders.

Our Operating Partnership may issue additional OP units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and may have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we may make to our stockholders. Any such issuances, or the perception of such issuances, could materially and adversely affect the market price of our common stock.

We are an “emerging growth company” and a “smaller reporting company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make shares of our common stock less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act. We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual gross revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities and (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. We intend to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. An attestation report by our auditor would require additional procedures by them that could detect problems with our internal control over financial reporting that are not detected by management. If our system of internal control over financial reporting is not determined to be appropriately designed or operating effectively, it could require us to restate financial statements, cause us to fail to meet reporting obligations and cause investors to lose confidence in our reported financial information, all of which could lead to a significant decline in the market price of our common stock. The JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. However, we have chosen to “opt out” of this extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We cannot predict if investors will find our common stock less attractive because we intend to rely on certain of these exemptions and benefits under the JOBS Act. If some investors find our common stock less attractive as a result, there may be a less active, liquid and/or orderly trading market for our common stock and the market price and trading volume of our common stock may be more volatile and decline significantly.

We will incur new costs as a result of becoming a public company, and such costs may increase when we cease to be an “emerging growth company.”

As a public company, we will incur significant legal, accounting, insurance and other expenses, including costs associated with public company reporting requirements. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect compliance with these public reporting requirements and associated rules and regulations to increase expenses, particularly after we are no longer an emerging growth company, although we are currently unable to estimate theses costs with any degree of certainty. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, which could result in our incurring additional costs applicable to public companies that are not emerging growth companies.

Risks Related to Our Qualification and Operation as a REIT

We believe that our organization and proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT commencing with our short taxable year ending December 31, 2019. However, we cannot assure you that we will qualify and remain qualified as a REIT. In connection with this offering, we will receive an opinion from Vinson & Elkins L.L.P. that, commencing with our short taxable year ending December 31, 2019, we will be organized in conformity with the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws and our proposed method of operations will enable us to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for our short taxable year ending December 31, 2019 and subsequent taxable years. Investors should be aware that Vinson & Elkins L.L.P.’s opinion is based upon customary assumptions, will be conditioned upon certain representations made by us as to factual matters, including representations regarding the nature of our assets and the conduct of our business, is not binding upon the Internal Revenue Service, or the IRS, or any court and speaks as of the date issued. In addition, Vinson & Elkins L.L.P.’s opinion will be based on existing U.S. federal income tax law governing qualification as a REIT, which is subject to change either prospectively or retroactively. Moreover, our qualification and taxation as a REIT depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the U.S. federal tax laws. Vinson & Elkins L.L.P. will not review our compliance with those tests on a continuing basis. Accordingly, no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because:

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we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

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we could be subject increased state and local taxes; and

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unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect our business, financial condition, results of operations or ability to make distributions to our stockholders and the trading price of our common stock. See “Material U.S. Federal Income Tax Considerations” for a discussion of material U.S. federal income tax consequences relating to us and an investment in our common stock.

Even if we qualify 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.

Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure and state or local income, property and transfer taxes. In addition, under new partnership audit procedures, our Operating Partnership and any other partnership that we may form or acquire may be liable at the entity level for tax imposed under those procedures. Further, any TRS that we may form in the future will be subject to regular corporate U.S. federal, state and local taxes. The TRS rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Any of these taxes would decrease cash available for distributions to stockholders, which, in turn, could materially adversely affect our business, financial condition, results of operations or ability to make distributions to our stockholders and the trading price of our common stock.

Failure to make required distributions would subject us to U.S. federal corporate income tax.

We intend to operate in a manner so as to qualify and maintain our qualification as a REIT for U.S. federal income tax purposes. In order to qualify and maintain our qualification as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year to our stockholders. To the extent that we satisfy this distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under the Code.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To qualify and maintain our qualification as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

In particular, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified real estate assets. The remainder of our investment in securities (other than government securities, securities of TRSs and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs and qualified real estate assets) can

consist of the securities of any one issuer, no more than 20% of the value of our total assets can be represented by the securities of one or more TRSs and no more than 25% of our assets can be represented by debt of “publicly offered REITs” (i.e., REITs that are required to file annual and periodic reports with the SEC under the Exchange Act), unless secured by real property or interests in real property. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

The relative lack of experience of our Manager in operating under the constraints imposed on us as a REIT may hinder the achievement of our investment objectives.

The Code imposes numerous constraints on the operations of REITs that do not apply to other investment vehicles, including CTO. Our qualification as a REIT depends upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets and other tests imposed by the Code. Any failure to comply could cause us to fail to satisfy the requirements associated with qualifying for and maintaining REIT status. Our Manager has relatively limited experience operating under these constraints, which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objectives. As a result, we cannot assure you that our Manager will be able to operate our business under these constraints. If we fail to qualify as a REIT for any taxable year, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests applicable to REITs. In addition, certain income from hedging transactions entered into to hedge existing hedging positions after any portion of the hedged indebtedness or property is extinguished or disposed of will not be included in income for purposes of the 75% and 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS.

Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a TRS.

As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services. If we forego providing such services to our tenants, we may be at a disadvantage to competitors that are not subject to the same restrictions. However, we can provide such non-customary services to tenant our share in the revenue from such services if we do so through a TRS, though income earned by such TRS will be subject to U.S. federal corporate income tax.

The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited transaction tax equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently, we may choose not to engage in certain sales of our properties or may conduct such sales through any TRS that we may form, which would be subject to U.S. federal corporate income tax.

We may pay taxable dividends in our common 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 common stock.

We may satisfy the 90% distribution test with taxable distributions of our common stock. The IRS has issued Revenue Procedure 2017-45 authorizing elective cash/stock dividends to be made by “publicly offered REITs.” Pursuant to Revenue Procedure 2017-45, the IRS will treat the distribution of stock pursuant to an elective cash/stock dividend as a distribution of property under Section 301 of the Code (i.e., a dividend), as long as at least 20% of the total dividend is available in cash and certain other parameters detailed in the Revenue Procedure are satisfied.

If we made a taxable dividend payable in cash and common stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. If we made a taxable dividend payable in cash and our common stock and a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. We do not currently intend to pay taxable dividends using both our common stock and cash, although we may choose to do so in the future.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines in good faith that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders.

Any 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.

Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRS. A TRS will be subject to applicable U.S. federal, state and local corporate income tax on its taxable income, and its after tax net income will be available for distribution to us but is not required to be distributed to us. In addition, the Code limits the deductibility of interest paid or accrued by a TRSs to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation and, in certain circumstances, other limitations on deductibility may apply. The Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of our respective investments in any TRS that we may form for the purpose of ensuring compliance with TRS ownership limitations and will structure our transactions with any TRS on terms that we believe are arm’s length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20% limitation or to avoid application of the 100% excise tax.

You may be restricted from acquiring or transferring certain amounts of our common stock.

The 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.

In order to qualify as a REIT for each taxable year beginning in 2020, five or fewer individuals, as defined in the Code, may not own, beneficially or constructively, more than 50% in value of our issued and outstanding capital stock at any time during the last half of a taxable year. Attribution rules in the Code determine if any individual or entity beneficially or constructively owns our shares of capital stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of capital stock during at least 335 days of a taxable year for each taxable year beginning in 2020. To help insure that we meet these tests, our charter restricts the acquisition and ownership of shares of our capital stock.

Our charter, with certain exceptions, requires our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, our charter prohibits any person from beneficially or constructively owning more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our shares of capital stock. Our board of directors may not grant an exemption from this restriction to any person if such exemption would result in our failing to qualify as a REIT. This as well as other restrictions on transferability and ownership will not apply, however, if our board of directors determines in good faith that it is no longer in our best interests to continue to qualify as a REIT.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum U.S. federal income tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are taxed at individual rates is 20% (plus the 3.8% surtax on net investment income, if applicable). Dividends payable by REITs, however, generally are not eligible for the reduced rates on qualified dividend income. However, for taxable years beginning before January 1, 2026, ordinary REIT dividends constitute “qualified business income” and thus a 20% deduction is available to individual taxpayers with respect to such dividends, resulting in a 29.6% maximum U.S. federal income tax rate (plus the 3.8% surtax on net investment income, if applicable) for individual U.S. stockholders. However, to qualify for this deduction, the stockholder receiving such dividends must hold the dividend-paying REIT stock for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the stock becomes ex-dividend, and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock.

We 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 common stock.

At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations which, in turn, could materially adversely affect our ability to make distributions to our stockholders and the trading price of our common and preferred stock.

The Tax Cuts and Jobs Act, or the TCJA, enacted in 2017, made significant changes to the U.S. federal income tax rules for taxation of individuals and corporations. In the case of individuals, the tax brackets were adjusted, the top U.S. federal income tax rate was reduced to 37%, special rules reduced taxation of certain income earned through pass-through entities and the top effective rate applicable to ordinary REIT dividends to 29.6% (through a 20% deduction for ordinary REIT dividends received) and various deductions were been eliminated or limited (including a limit on the deduction for state and local taxes to $10,000 per year). Most of the changes applicable to individuals are temporary and apply only to taxable years beginning after December 31, 2017 and before January 1, 2026. The top corporate income tax rate was been reduced to 21%. There are only minor changes to the REIT rules (other than the 20% deduction applicable to individuals for ordinary REIT dividends received). Technical corrections and amendments to the TCJA and additional administrative guidance with respect to the TCJA may still be forthcoming. The TCJA made numerous other large and small changes to the tax rules that do not affect REITs directly but may affect our stockholders and may indirectly affect us.

If our 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.

We believe that our Operating Partnership will be treated as a partnership for U.S. federal income tax purposes. As a partnership, our Operating Partnership will not be subject to U.S.

federal income tax on its income. Instead, each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income. We cannot assure you, however, that the IRS will not challenge the status of our Operating Partnership or any other subsidiary partnership in which we own an interest as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of our Operating Partnership or any subsidiary partnership to qualify as a partnership could cause such partnership to become subject to U.S. federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

Risks Related to Our Common Stock and this Offering

There has been no public market for our common stock prior to this offering and an active trading market may not develop or be sustained or be liquid following this offering, which may cause the market price of our common stock to decline significantly and make it difficult for investors to sell their shares.

Prior to this offering, there has been no public market for our common stock, and there can be no assurance that an active trading market will develop or be sustained or be liquid following this offering or that shares of our common stock will be resold at or above the public offering price. The public offering price of shares of our common stock will be determined by agreement among us and the underwriters, but there can be no assurance that our common stock will not trade below the public offering price following the completion of this offering. The market price of our common stock could be substantially affected by general market conditions, including the extent to which a secondary market develops and is sustained for our common stock following the completion of this offering, the extent of institutional investor interest in us, the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities of other entities (including securities issued by other real estate-based companies), our financial performance and prospects and general stock and bond market conditions.

The stock markets, including the NYSE on which we intend to list shares of our common stock, have from time to time experienced significant price and volume fluctuations. As a result, the market price of our common stock may be similarly volatile, and investors in shares of our common stock may from time to time experience a decrease in the market price of their shares, including decreases unrelated to our financial performance or prospects. The market price of shares of our common stock could be subject to wide fluctuations in response to a number of factors, including those discussed in this “Risk Factors” section, and others, such as:

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our financial condition and operating performance and the financial condition or performance of other similar companies;

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actual or anticipated differences in our quarterly or annual operating results than expected;

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changes in our revenues, FFO, AFFO or earnings estimates or recommendations by securities analysts;

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publication of research reports about us or the real estate industry generally;

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increases in market interest rates, which may lead investors to demand a higher distribution yield for shares of our common stock, and could result in increased interest expense on our debt;

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adverse market reaction to any increased indebtedness we incur in the future;

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actual or anticipated changes in our and our tenants’ businesses or prospects;

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the current state of the credit and capital markets, and our ability and the ability of our tenants to obtain financing on favorable terms;

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conflicts of interest with CTO and its affiliates, including our Manager;

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the termination of our Manager or additions and departures of key personnel of our Manager;

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increased competition in our markets;

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strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business or growth strategies;

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the passage of legislation or other regulatory developments that adversely affect us or our industry;

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adverse speculation in the press or investment community;

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actions by institutional stockholders;

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the extent of investor interest in our securities;

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the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

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investor confidence in the stock and bond markets, generally;

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changes in tax laws;

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equity issuances by us (including the issuances of OP units), or common stock resales by our stockholders, or the perception that such issuances or resales may occur;

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volume of average daily trading and the amount of our common stock available to be traded;

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actual, potential or perceived accounting problems;

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changes in accounting principles;

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failure to qualify and maintain our qualification as a REIT;

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failure to comply with the rules of the NYSE or maintain the listing of our common stock on the NYSE;

•

terrorist acts, natural or man-made disasters or threatened or actual armed conflicts; and

•

general market and local, regional and national economic conditions, including factors unrelated to our operating performance and prospects.

No assurance can be given that the market price of our common stock will not fluctuate or decline significantly in the future or that holders of shares of our common stock will be able to sell their shares when desired on favorable terms, or at all. From time to time in the past, securities class action litigation has been instituted against companies following periods of extreme volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources.

We intend to make cash distributions to our stockholders in amounts such that all or substantially all of our taxable income in each year, subject to adjustments, is distributed. Our ability to continue to make distributions in the future may be adversely affected by the risk factors described in this prospectus. We can give no assurance that we will be able to make or maintain distributions and certain agreements relating to our indebtedness may, under certain circumstances, limit or eliminate our ability to make distributions to our common stockholders. We can give no assurance that rents from our properties will increase, or that future acquisitions of real properties or other investments will increase our cash available for distributions to stockholders. In addition, any distributions will be authorized at the sole discretion of our board of directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law and such other factors as our board of directors deems relevant.

Distributions are expected to be based upon our FFO, AFFO, financial condition, cash flows and liquidity, debt service requirements and capital expenditure requirements for our properties. If we do not have sufficient cash available for distributions, we may need to fund the shortage out of working capital or borrow to provide funds for such distributions, which would reduce the amount of proceeds available for real estate investments and increase our future interest costs. Our inability to make distributions, or to make distributions at expected levels, could result in a decrease in the per share trading price of our common stock.

The market value of our common stock is subject to various factors that may cause significant fluctuations or volatility.

As with other publicly-traded securities, the market price of our common stock depends on various factors, which may change from time to time and/or may be unrelated to our financial condition, results of operations or cash flows. These factors may cause significant fluctuations or volatility in the market price of our common stock. These factors include, but are likely not limited to, the following:

•

general economic and financial market conditions, including a weak economic environment;

•

level and trend of interest rates;

•

our ability to access the capital markets to raise additional debt or equity capital;

•

changes in our cash flows or results of operations;

•

our financial condition and performance;

•

market perception of our company compared to other real estate companies;

•

market perception of the real estate sector compared to other investment sectors; and

•

volume of average daily trading and the amount of our common stock available to be traded.

The market price of our common stock could be adversely affected by our level of cash distributions.

We believe the market price of the equity securities of a REIT is based primarily upon the market’s perception of the REIT’s growth potential, its current and potential future cash distributions, whether from operations, sales or refinancing, and its management and governance structure and is secondarily based upon the real estate market value of the underlying assets. For that reason, our common stock may trade at prices that are higher or lower than our net asset value per share. To the extent we retain operating cash flows for investment purposes, working capital reserves or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of our common stock. If we fail to meet the market’s expectations with regard to future operating results and cash distributions, the market price of our common stock could be adversely affected.

Increases in market interest rates may result in a decline in the market price of our common stock.

One of the factors that will influence the market price of our common stock will be the distribution yield on the common stock (as a percentage of the market price of our common stock) relative to market interest rates. An increase in market interest rates, which are currently at low levels relative to historical rates, may lead prospective purchasers of shares of our common stock to expect a higher distribution yield and higher interest rates would likely increase our borrowing costs and potentially decrease our cash available for distribution. Thus, higher market interest rates could cause the market price of our common stock to decline.

Future issuances of debt securities, which would rank senior to shares of our common stock upon our liquidation, and future issuances of equity securities (including preferred stock and OP units), which would dilute the holdings of our then-existing common stockholders and may be senior to shares of our common stock for the purposes of making distributions, periodically or upon liquidation, may materially and adversely affect the market price of our common stock.

In the future, we may issue debt or equity securities or incur other borrowings. Upon liquidation, holders of our debt securities and other loans and shares of our preferred stock will receive a distribution of our available assets before holders of shares of our common stock. We are not required to offer any debt or equity securities to existing stockholders on a preemptive basis. Therefore, shares of our common stock that we issue in the future, directly or through convertible or exchangeable securities (including OP units), warrants or options, will dilute the holdings of our then-existing common stockholders and such issuances or the perception of such issuances may reduce the market price of our common stock. Our preferred stock, if issued, would likely have a preference on distribution payments, periodically or upon liquidation, which could limit our ability to make distributions to holders of shares of our common stock. Because our decision to

issue debt or equity securities or otherwise incur debt in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or impact of our future capital raising efforts. Thus, holders of shares of our common stock bear the risk that our future issuances of debt or equity securities or our incurrence of other borrowings may materially and adversely affect the market price of shares of our common stock and dilute their ownership in us.

Sales 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 your voting power and your ownership interest in us.

Sales of substantial amounts of our common stock in the public market following this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Upon the completion of this offering and the concurrent CTO private placement, we expect to have outstanding 7,883,000 shares of our common stock (or 9,008,000 shares of our common stock if the underwriters exercise in full their option to purchase additional shares).

The shares of our common stock that we are selling in this offering may be resold immediately in the public market unless they are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act. The common stock to be purchased by CTO in the concurrent CTO private placement and the shares of common stock underlying the OP units to be issued in the formation transactions will be “restricted securities” within the meaning of Rule 144 under the Securities Act and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemptions contained in Rule 144. Subject to certain exceptions, we, our Manager, our executive officers, directors and director nominees and CTO have agreed with the underwriters not to offer, sell, transfer or otherwise dispose of any of our common stock or any securities convertible into or exercisable or exchangeable for, exercisable for, or repayable with our common stock, for a period of 180 days after the date of this prospectus without first obtaining the written consent of Raymond James & Associates, Inc. As a result of the registration rights agreement that we will enter into with CTO, the shares of our common stock to be issued in the concurrent CTO private placement may be eligible for future sale without restriction, subject to applicable lock-up arrangements. See “Shares Eligible for Future Sale—Registration Rights” and “Certain Relationships and Related Person Transactions—Registration Rights.” Sales of a substantial number of such shares upon expiration of the lock-up agreements, the perception that such sales may occur or early release of these agreements, could cause the market price of our common stock to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

In addition, upon completion of this offering, our charter will provide that we may issue up to 500,000,000 shares of common stock and 100,000,000 shares of preferred stock, $0.01 par value per share. Moreover, under Maryland law and as will be provided in our charter, a majority of our entire board of directors will have the power to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue without stockholder approval. Future issuances of shares of our common stock or securities convertible or exchangeable into common stock may dilute the ownership interest of our common stockholders. Because our decision to issue additional equity or convertible or exchangeable securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future issuances. In addition, we are not required to offer any such securities to existing stockholders on a preemptive basis. Therefore, it may not be possible for existing stockholders to participate in such future issuances, which may dilute the existing stockholders’ interests in us.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws. In particular, statements pertaining to our business and growth strategies, investment and leasing activities and trends affecting our business contain forward-looking statements. When used in this prospectus, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately,” or “plan,” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.

Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•

general business and economic conditions;

•

continued volatility and uncertainty in the credit markets and broader financial markets;

•

other risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters;

•

availability of suitable properties to acquire and our ability to acquire and lease those properties on favorable terms;

•

ability to renew leases, lease vacant space or re-lease space as existing leases expire or are terminated;

•

the degree and nature of our competition;

•

our failure to generate sufficient cash flows to service our outstanding indebtedness;

•

our inability to close on our anticipated revolving credit facility;

•

access to debt and equity capital markets;

•

fluctuating interest rates;

•

the occurrence of natural disasters, acts of violence or other events impacting our properties or our business generally;

•

the occurrence of uninsured losses;

•

the effects of climate change;

•

availability of, and our Manager’s ability to attract, retain and make available to us, qualified personnel or the termination of our Manager;

•

conflicts of interest with CTO, our Manager and their affiliates;

•

changes in, or the failure or inability to comply with, government regulation, including Maryland laws;

•

failure to qualify and maintain our qualification as a REIT;

•

changes in U.S. tax law and other U.S. laws, whether or not specific to REITs; and

•

additional factors discussed in the sections entitled “Business and Properties,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this prospectus. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events, except as required by law. In light of these risks and uncertainties, the forward-looking events discussed in this prospectus might not occur as described, or at all.

USE OF PROCEEDS

We estimate that the net proceeds to us from this offering and the concurrent CTO private placement will be approximately $144.7 million, or $165.6 million if the underwriters exercise in full their option to purchase additional shares, after deducting underwriting discounts and commissions and other estimated expenses payable by us, in each case, based on an assumed public offering price of $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus.

We intend to use approximately $9.1 million of the net proceeds from this offering and the concurrent CTO private placement to fund the cash purchase price for the REIT Purchased Properties. We will contribute these properties and the remaining net proceeds from this offering and the concurrent CTO private placement to our Operating Partnership in exchange for OP units. We intend to cause our Operating Partnership to use approximately $116.8 million of the remaining net proceeds from this offering and the concurrent CTO private placement to fund the cash purchase price for the OP Purchased Properties. Any remaining net proceeds will be used for general corporate and working capital purposes, including possible future property acquisitions.

Pending the permanent use of the net proceeds from these offerings, we intend to cause our Operating Partnership to invest the net proceeds in interest-bearing, short-term investment-grade securities, money-market accounts or other investments that are consistent with our intention to qualify for taxation as a REIT for U.S. federal income tax purposes.

DISTRIBUTION POLICY

We intend to make a pro rata distribution with respect to the period commencing upon the completion of this offering and ending on December 31, 2019, based on a distribution rate of $0.20 per share of common stock for a full quarter. On an annualized basis, this would be $0.80 per share of common stock, or an annualized distribution rate of approximately 4.0% based on the mid-point of the price range set forth on the front cover of this prospectus. We estimate that this initial annual distribution rate will represent approximately 93.0% of our estimated cash available for distribution to stockholders for the twelve months ending September 30, 2020. We do not intend to reduce the annualized distribution per share of common stock if the underwriters exercise their option to purchase additional shares. Our intended initial annual distribution rate has been established based on our estimate of cash available for distribution for the twelve months ending September 30, 2020, which we have calculated based on adjustments to our pro forma net income for the twelve months ended September 30, 2019. This estimate was based on our pro forma operating results and does not take into account our long-term business and growth strategies, nor does it take into account any unanticipated expenditures we may have to make or any financings for such expenditures. In estimating our cash available for distribution for the twelve months ending September 30, 2020, we have made certain assumptions as reflected in the table and footnotes below.

Our estimate of cash available for distribution does not include the effect of any changes in our working capital resulting from changes in our working capital accounts. It also does not reflect the amount of cash estimated to be used for investing activities, financing activities or other activities. Any such investing and/or financing activities may have a material and adverse effect on our estimate of cash available for distribution. Because we have made the assumptions described herein in estimating cash available for distribution, we do not intend this estimate to be a projection or forecast of our actual results of operations, FFO, AFFO, liquidity or financial condition, and we have estimated cash available for distribution for the sole purpose of determining our estimated initial annual distribution amount. Our estimate of cash available for distribution should not be considered as an alternative to cash flow from operating activities (computed in accordance with GAAP) or as an indicator of our liquidity or our ability to make distributions. In addition, the methodology upon which we made the adjustments described herein is not necessarily intended to be a basis for determining future distributions.

We intend to maintain our initial distribution rate for the 12 months following the completion of this offering unless our financial condition, results of operations, FFO, AFFO, liquidity and cash flows, general business prospects, economic conditions or other factors differ materially from the assumptions used in projecting our initial distribution rate. We believe that our estimate of cash available for distribution constitutes a reasonable basis for setting the initial distribution rate. However, we cannot assure you that our estimate will prove accurate, and actual distributions may therefore be significantly below the expected distributions. Our actual results of operations will be affected by a number of factors, including the revenue received from the tenants leasing our properties, our operating expenses, interest expense and unanticipated capital expenditures.

We cannot assure you that our estimated distributions will be made or sustained or that our board of directors will not change our distribution policy in the future. Any distributions will be at the sole discretion of our board of directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law, including restrictions on distributions

under Maryland law, and such other factors as our board of directors deems relevant. For more information regarding risk factors that could materially and adversely affect us and our ability to make cash distributions, see “Risk Factors.” If our operations do not generate sufficient cash flow to enable us to pay our intended or required distributions, we may be required either to fund distributions from working capital, to borrow or raise equity or to reduce the amount of such distributions. In addition, our charter allows us to issue preferred stock that could have a preference on any distributions we make and could limit our ability to make distributions to our stockholders. Additionally, under certain circumstances, agreements relating to our indebtedness could limit our ability to make distributions to our stockholders.

The U.S. federal income tax laws require that a REIT distribute annually at least 90% of its REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, and that it pay tax at U.S. federal corporate income tax rates to the extent that it annually distributes less than 100% of its REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains. In addition, a REIT will be required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions it makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income, and 100% of its undistributed income from prior years. For more information, see “Material U.S. Federal Income Tax Considerations.” We anticipate that our estimated cash available for distribution will be sufficient to enable us to meet the annual distribution requirements applicable to REITs and to avoid or minimize the imposition of corporate and excise taxes. However, under some circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet these distribution requirements or to avoid or minimize the imposition of tax, and we may need to borrow funds to make certain distributions.

The following table sets forth calculations relating to the estimated initial distribution based on our pro forma net income for the twelve months ended September 30, 2019, as adjusted. and is provided solely for the purpose of illustrating the estimated initial distribution and is not intended to be a basis for determining future distributions.



Pro Forma Net Income for the year ended December 31, 2018	$	2,374,237

Less: pro forma net income for the nine-months ended September 30, 2018		(1,780,678	)

Add: pro forma net income for the nine-months ended September 30, 2019		1,812,287


Pro Forma Net Income for the twelve-months ended September 30, 2019	$	2,405,846

Add: estimated net increases in contractual rental revenue (1)		47,050

Add: real estate depreciation and amortization		3,934,733

Add: other depreciation and amortization		1,754,743

Add: non-cash compensation expense (2)		160,000

Add: non-cash interest expense		172,500

Less: net effect of non-cash rental revenue (amortization of lease intangible assets) (3)		(640,397	)


Estimated Cash Available for Distribution for the twelve-months ended September 30, 2020	$	7,834,475

Our stockholders’ share of estimated cash available for distribution (4)	$	6,781,614

Non-controlling interests’ share of estimated cash available for distribution (5)	$	1,052,861

Estimated initial annual distribution per share of common stock and per OP Unit	$	0.80

Total estimated initial annual distribution to stockholders (6)	$	6,306,400

Total estimated initial annual distribution to non-controlling interests (7)	$	979,083

Total estimated initial annual distribution to stockholders and non-controlling interests	$	7,285,483

Payout ratio (8)		93.0	%

(1)

Represents contractual increases in rental revenue from: (a) scheduled fixed rent increases; (b) contractual increases including (i) increases that have already occurred but were not in effect for the entire twelve months ended September 30, 2019 and (ii) actual increases that have occurred from September 30, 2019 through October 28, 2019; and (c) net increases from new leases or renewals that were not in effect for the entire twelve months ended September 30, 2019 or that will go into effect during the twelve months ending September 30, 2020 based upon leases entered into through October 28, 2019.

(2)	Represents non-cash stock-based compensation expense related to equity-based awards granted to certain members of our board of directors and reflected in our pro forma net income for the twelve months ended September 30, 2019.

(3)	Represents net non-cash rental revenues associated with the net straight-line adjustment to rental revenue, the amortization of above- and below-market lease intangibles and capitalized lease incentives.

(4)	Based on our estimated ownership of approximately 86.6% of our Operating Partnership, based on the mid-point of the price range set forth on the front cover of this prospectus.

(5)	Represents the share of our estimated cash available for distribution for the twelve months ending September 30, 2020 that is attributable to the holders of OP units other than us, based on the mid-point of the price range set forth on the front cover of this prospectus.

(6)	Based on a total of 7,883,000 shares of our common stock expected to be outstanding upon completion of this offering, the concurrent CTO private placement and the formation transactions, based on the mid-point of the price range set forth on the front cover of this prospectus.

(7)	Based on a total of 1,223,854 OP units expected to be outstanding upon completion of this offering, the concurrent CTO private placement and the formation transactions and excludes OP units held by us.

(8)

Calculated as total estimated initial annual distribution to stockholders divided by our stockholders’ share of estimated cash available for distribution for the twelve months ending September 30, 2020. If the underwriters exercise their option to purchase additional shares in full, our total estimated initial annual distribution to stockholders would be approximately $8.2 million and our payout ratio would be 104.5%.

CAPITALIZATION

The following table sets forth (i) the actual capitalization of Alpine Income Property Trust Predecessor as of September 30, 2019 and (ii) our pro forma capitalization as of September 30, 2019, after giving effect to this offering, the concurrent CTO private placement, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements included elsewhere in this prospectus, based on an assumed public offering price of $20.00, which is the mid-point of the price range set forth on the front cover of this prospectus. You should read this table in conjunction with “Use of Proceeds,” “Selected Historical and Pro Forma Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and our unaudited pro forma consolidated financial statements and related notes and the audited and unaudited financial statements of Alpine Income Property Trust Predecessor and related notes appearing elsewhere in this prospectus.


	As of September 30, 2019
	Alpine Income Property Trust Predecessor Historical		Alpine Income Property Trust, Inc. Pro Forma

Cash and Cash Equivalents:	$	60,267	$	18,170,750

Equity:

Preferred Stock, $0.01 par value per share, no shares authorized, no shares issued and outstanding, historical; 100 million shares authorized, no shares issued and outstanding pro forma		—		—

Common Stock, $0.01 par value per share, no shares authorized, no shares issued and outstanding, historical; 500 million shares authorized, 7,883,000 shares issued and outstanding, pro forma (1)		—		78,830

Additional paid in capital		—		144,596,491


Total Equity		147,577,915		144,675,321

Noncontrolling interest		—		24,477,080


Total Capitalization	$	147,577,915	$	169,152,401

(1)

Pro forma common stock outstanding includes (a) 7,500,000 shares of our common stock to be issued in this offering, (b) 375,000 shares of our common stock to be issued to CTO in the concurrent CTO private placement and (c) 8,000 restricted shares of common stock to be granted to our independent directors in connection with the completion of this offering pursuant to the Individual Equity Incentive Plan. Excludes up to (a) 1,125,000 shares of our common stock issuable upon the exercise in full of the underwriters’ option to purchase additional shares, (b) 751,389 shares of our common stock available for future issuance pursuant to the Equity Incentive Plans, (c) 1,223,854 shares of our common stock issuable by us, at our option, upon redemption of the OP units to be issued to CTO and Indigo in the formation transactions and (d) 100 shares of our common stock that were issued to John P. Albright, President and Chief Executive Officer of our company and CTO, for $1,000 in connection with our initial capitalization and that will be repurchased by us at the closing of this offering.

DILUTION

Purchasers of shares of our common stock in this offering will experience an immediate and substantial dilution of the pro forma net tangible book value per share of our common stock, after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, from the public offering price, based on an assumed public offering price of $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus. Net tangible book value per share represents the amount of total tangible assets less total tangible liabilities, divided by the number of outstanding shares of common stock, assuming the exchange of OP units for shares of our common stock on a one-for-one basis. Our pro forma net tangible book value as of September 30, 2019, after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, excludes $15.4 million in net intangible lease assets (net of applicable intangible lease liabilities) associated with our initial portfolio.

The difference between the public offering price paid by purchasers of our common stock in this offering and our pro forma net tangible book value per share of our common stock as of September 30, 2019, after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, constitutes the dilution to purchasers in this offering.

As of September 30, 2019, our pro forma net tangible book value after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments would have been approximately $153.9 million, or $16.90 per share of our common stock (in each case, assuming a public offering price of $20.00 per share, which is the mid-point of the price range set forth on the front cover of this prospectus, and no exercise by the underwriters of their option to purchase additional shares). This amount represents an immediate dilution in pro forma net tangible book value per share of approximately $3.10 per share of our common stock to purchasers in this offering. The following table illustrates this per share dilution:



Assumed public offering price per share			$	20.00

Historical net tangible book value per share as of September 30, 2019, after giving effect to our initial capitalization but before the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments (1)	$	10.00

Increase in historical net tangible book value per share after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments		6.90


Pro forma net tangible book value per share as of September 30, 2019, after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments (2)				16.90


Dilution in pro forma net tangible book value per share to new investors (3)			$	3.10

(1)

Historical net tangible book value per share as of September 30, 2019, after giving effect to the transaction in which we were capitalized with an initial investment of $1,000 in exchange for 100 shares of our common stock. Such shares will be repurchased by us at the closing of this offering for $1,000.

(2)

Pro forma net tangible book value per share as of September 30, 2019 after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments was determined by dividing pro forma net tangible book value of approximately $153.9 million by 9,106,854 shares of common stock to be outstanding after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments (assuming the exchange of 1,223,854 OP units for shares of common stock on a one-for-one basis). For purposes of this calculation, we have excluded shares of our common stock that may be issued upon exercise of the underwriters’ option to purchase additional shares, the related proceeds and the issuance of additional shares of our common stock that have been reserved for future issuance under the Equity Incentive Plans.

(3)

Dilution in pro forma net tangible book value per share to new investors was determined by subtracting our pro forma net tangible book value per share as of September 30, 2019 after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, from the assumed public offering price paid by a new investor for our common stock.

Assuming the underwriters exercise their option to purchase additional shares of our common stock in full, our pro forma net tangible book value as of September 30, 2019, after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, would have been $174.8 million, or $17.09 per share of common stock (assuming the exchange of the 1,223,854 OP units to be issued to CTO in the formation transactions for shares of our common stock on a one-for-one basis). This represents an immediate dilution in our pro forma net tangible book value as of September 30, 2019 of $2.91 per share of common stock to new investors.

The table below summarizes, as of September 30, 2019, on a pro forma basis after giving effect to the formation transactions, this offering, the concurrent CTO private placement and other pro forma adjustments, the differences between:

•

the number of OP units to be received by CTO in the formation transactions, the number of shares of common stock to be received by CTO in the concurrent CTO private placement and the number of shares of common stock to be received by new investors purchasing shares in this offering; and

•

the total consideration paid and the average price per OP unit paid by CTO (based on the pro forma net tangible book value of the assets being contributed to our Operating Partnership in the formation transactions in exchange for OP units) and the total consideration paid and the average price per share paid by each of CTO in the concurrent CTO private placement and the new investors purchasing shares in this offering.


	OP Units/Shares Issued						Pro Forma Net Tangible Book Value of Contribution/Cash					Average Price Per Share or OP Unit
	Number			Percentage			Amount		Percentage			Average Price Per Share or OP Unit

OP units to be received by CTO		1,223,854			13.4	%	$	24,477,080		13.5	%	$	20.00

Shares of common stock to be received by CTO in the concurrent CTO private placement		375,000			4.1	%	$	7,500,000		4.1	%	$	20.00

Restricted shares of common stock to be received by independent directors		8,000			0.1	%	$	—		—		$	—

Shares of common stock to be received by new investors in this offering		7,500,000			82.4	%	$	150,000,000		82.4	%	$	20.00


Total/Average		9,106,854	(1)		100.0	%	$	181,977,080		100.0	%	$	20.00

(1)

Excludes up to (a) 1,125,000 shares of our common stock issuable upon the exercise in full of the underwriters’ option to purchase additional shares, (b) 751,389 shares of our common stock available for future issuance pursuant to the Equity Incentive Plans, (c) 1,223,854 shares of our common stock issuable by us, at our option, upon redemption of the OP units to be issued to CTO in the formation transactions and (d) 100 shares of our common stock that were issued to John P. Albright, President and Chief Executive Officer of our company and CTO, for $1,000 in connection with our initial capitalization and that will be repurchased by us at the closing of this offering.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA

Set forth below is selected financial and other data presented on (i) a historical basis for Alpine Income Property Trust Predecessor and (ii) a pro forma basis for our company after giving effect to the completion of this offering, the concurrent CTO private placement, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements beginning on page F-2 of this prospectus. We have not presented historical data for Alpine Income Property Trust, Inc. because we have not had any corporate activity since our formation other than the issuance of common stock in connection with our initial capitalization and activity in connection with this offering and the formation transactions. Accordingly, we do not believe that a presentation of the historical results of Alpine Income Property Trust, Inc. would be meaningful. Prior to or concurrently with the completion of this offering, we will consummate the formation transactions pursuant to which, among other things, we will acquire our initial portfolio from CTO. Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our Operating Partnership. For more information regarding the formation transactions, please see “Structure and Formation of Our Company.”

Alpine Income Property Trust Predecessor’s historical combined balance sheet data as of December 31, 2018 and 2017 and combined operating data for the years ended December 31, 2018 and 2017 have been derived from Alpine Income Property Trust Predecessor’s audited historical combined financial statements included elsewhere in this prospectus, reflect the financial position and results of operations of 15 of the 20 single-tenant properties in our initial portfolio and are not necessarily indicative of our future performance. Alpine Income Property Trust Predecessor’s historical combined balance sheet data as of September 30, 2019 and combined operating data for the nine months ended September 30, 2019 and 2018 have been derived from Alpine Income Property Trust Predecessor’s unaudited historical combined financial statements included elsewhere in this prospectus. Alpine Income Property Trust Predecessor’s unaudited interim financial and operating data, in management’s opinion, has been prepared in accordance with GAAP on the same basis as its audited financial statements and related notes included elsewhere in this prospectus and, in the opinion of management, reflects all adjustments consisting only of normal recurring adjustments that management considers necessary to state fairly the financial information as of and for the periods presented. The historical combined financial data included below and set forth elsewhere in this prospectus are not necessarily indicative of our future performance, and results for any interim period are not necessarily indicative of the results for any full year.

Our unaudited selected pro forma consolidated financial and operating data as of September 30, 2019 and for the nine months ended September 30, 2019 and the year ended December 31, 2018 assume the completion of this offering, the concurrent CTO private placement, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements had occurred on September 30, 2019 for purposes of the unaudited pro forma consolidated balance sheet data and on January 1, 2018 for purposes of the unaudited pro forma consolidated statements of operations data. Our pro forma financial information is not necessarily indicative of what our actual financial position and results of operations would have been as of the date and for the period indicated, nor does it purport to represent our future financial position or results of operations.

You should read the following selected financial and other data together with Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business and Properties” and the historical and pro forma financial statements and related notes appearing elsewhere in this prospectus.



Operating Data:

	Nine Months Ended September 30,							Year Ended December 31,
	2019 (Pro Forma) (Unaudited)			2019 (Historical) (Unaudited)		2018 (Historical) (Unaudited)		2018 (Pro Forma) (Unaudited)			2018 (Historical)		2017 (Historical)

Revenues

Lease Income	$	10,593,307		$	9,426,482	$	8,834,994	$	14,183,736		$	11,719,549	$	8,454,498


Total Revenues		10,593,307			9,426,482		8,834,994		14,183,736			11,719,549		8,454,498


Direct Costs of Revenues

Real Estate Expenses		1,138,539			1,138,539		1,064,257		1,619,523			1,619,523		1,468,792


Total Direct Costs of Revenues		1,138,539			1,138,539		1,064,257		1,619,523			1,619,523		1,468,792

Interest Expense		129,375			—		—		172,500			—		286,242

General and Administrative Expenses		3,246,000			1,415,330		966,685		4,328,000			1,184,352		829,349

Depreciation and Amortization		4,267,106			3,946,794		3,643,709		5,689,476			4,900,719		3,057,346


Total Expenses		8,781,020			6,500,663		5,674,651		11,809,499			7,704,594		5,641,729


Net Income		1,812,287		$	2,925,819	$	3,160,343		2,374,237		$	4,014,955	$	2,812,769


Less: Net Income Attributable to Noncontrolling Interest		(243,550	)						(319,070	)


Net Income Attributable to Alpine Income Property Trust, Inc.	$	1,568,737						$	2,055,167


Pro forma weighted average common shares outstanding—basic		7,883,000							7,883,000

Pro forma weighted average common shares outstanding—diluted		9,106,854							9,106,854

Pro forma basic earnings per share	$	0.20						$	0.26

Pro forma diluted earnings per share	$	0.17						$	0.23



Balance Sheet Data:

	As of September 30,				As of December 31,
	2019 (Pro Forma) (Unaudited)		2019 (Historical) (Unaudited)		2018 (Historical)		2017 (Historical)

Total Real Estate, at cost	$	134,976,509	$	143,943,628	$	120,151,964	$	115,342,470

Real Estate—Net	$	134,976,509	$	132,338,606	$	111,151,636	$	109,583,922

Cash and Cash Equivalents	$	18,170,750	$	60,267	$	8,258	$	6,900

Intangible Lease Assets—Net	$	17,783,964	$	12,890,412	$	10,555,596	$	11,545,306

Straight-Line Rent Adjustment	$	—	$	1,819,372	$	1,483,390	$	1,032,824

Deferred Expenses	$	585,000	$	2,911,836	$	3,223,768	$	3,640,039

Other Assets	$	—	$	220,713	$	128,300	$	169,402

Total Assets	$	171,516,223	$	150,241,206	$	126,550,948	$	125,978,393

Accounts Payable, Accrued Expenses, and Other Liabilities	$	—	$	426,778	$	307,133	$	3,464,844

Prepaid Rent and Deferred Revenue	$	—	$	337,466	$	344,682	$	371,937

Intangible Lease Liabilities—Net	$	2,363,822	$	1,899,047	$	1,710,037	$	1,761,764

Total Liabilities	$	2,363,822	$	2,663,291	$	2,361,852	$	5,598,545

Total Equity	$	169,152,401	$	147,577,915	$	124,189,096	$	120,379,848



Other Data:

	Nine Months Ended September 30,						Year Ended December 31,
	2019 (Pro Forma) (Unaudited)		2019 (Historical) (Unaudited)		2018 (Historical) (Unaudited)		2018 (Pro Forma) (Unaudited)		2018 (Historical) (Unaudited)		2017 (Historical) (Unaudited)

FFO	$	6,079,393	$	6,872,613	$	6,804,052	$	8,063,713	$	8,915,674	$	5,870,115

AFFO	$	5,753,859	$	7,009,039	$	6,744,456	$	7,567,426	$	8,770,636	$	5,507,028

(1)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The historical combined financial statements of our accounting predecessor, Alpine Income Property Trust Predecessor, appearing elsewhere in this prospectus do not represent the financial position and results of operations of one legal entity, but rather a combination of entities under common control that have been “carved out” from CTO’s consolidated financial statements. The historical financial position and results of operations, as reflected in the historical combined financial statements of Alpine Income Property Trust Predecessor and related notes, are subject to management’s evaluation and interpretation of business conditions, changing capital market conditions and other factors that could affect the ongoing viability of our properties.

The following discussion of our financial condition and results of operations should be read together with the “Selected Historical and Pro Forma Financial and Other Data,” “Business and Properties” and combined financial statements unaudited pro forma consolidated financial statements and, in each case, the related notes that are included elsewhere in this prospectus. Where appropriate, the following discussion includes the effects of the completion of the formation transactions, this offering, the concurrent CTO private placement and the use of the net proceeds therefrom on a pro forma basis. These effects are reflected in our unaudited pro forma financial statements included elsewhere in this prospectus. This discussion contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors,” “Special Note Regarding Forward-Looking Statements” or in other parts of this prospectus.

Unless the context otherwise requires or indicates, references in this section to “we,” “our,” “us” and “our company” refer to (i) Alpine Income Property Trust, Inc. and its consolidated subsidiaries (including our Operating Partnership) after giving effect to the formation transactions and (ii) our accounting predecessor, Alpine Income Property Trust Predecessor, before giving effect to the formation transactions.

Overview

We are a newly organized real estate company that owns and operates a high-quality portfolio of single-tenant commercial properties. All of the properties in our initial portfolio are leased on a long-term basis and located primarily in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. Eighteen of the 20 properties in our initial portfolio, representing approximately 82% of our initial portfolio’s annualized base rent (as of September 30, 2019), are leased on a triple-net basis. Our properties are primarily leased to industry leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce. Our initial portfolio consists of 20 single-tenant, primarily net leased retail and office properties located in 15 markets in ten states, which we acquired from CTO in our formation transactions utilizing proceeds from this offering and the concurrent CTO private placement as well as OP units. We are externally managed by our Manager, a wholly-owned subsidiary of CTO. Concurrently with the closing of this offering, CTO will invest $7.5 million in exchange for shares of our common stock at a price per share equal to the public offering price per share in this offering. Upon completion of this offering, the concurrent CTO private placement and the formation transactions, CTO will own approximately 17.6% of our outstanding common stock (assuming the OP units to be issued to CTO in the formation transactions are exchanged for shares of our common stock on a one-for-one basis).

We intend to elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our short taxable year ending December 31, 2019. We believe that our organization and

proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT commencing with such taxable year, and we intend to continue operating in such a manner.

This Offering and Our Formation

Upon completion of the formation transactions, this offering and the concurrent CTO private placement, we expect our operations to be carried out through our Operating Partnership. Our wholly-owned subsidiary is the sole general partner of our Operating Partnership. We will hold an 86.6% limited partnership interest in our Operating Partnership, and CTO will hold, directly and indirectly, a 13.4% limited partnership interest in our Operating Partnership through its direct and indirect ownership of OP units received in exchange for the contribution of certain properties in the formation transactions. In general, OP units are exchangeable for cash or, at our election, shares of our common stock at a one-to-one ratio. See “Description of the Partnership Agreement of Alpine Income Property OP, LP.” All of our real estate will be held by our Operating Partnership or its wholly-owned subsidiaries.

Income Property Operations

We will employ a disciplined growth strategy, which emphasizes investing in high quality single-tenant, net leased properties located in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. We intend to acquire properties leased primarily to industry-leading, creditworthy tenants, many of which operate in industries resistant to the impact of e-commerce.

We believe that the single-tenant commercial properties we own and intend to acquire will provide our stockholders with investment diversification and can deliver strong risk-adjusted returns. We expect the majority of our net leased properties will be single-tenant retail properties, with the remainder comprised of single-tenant office properties that are critical to the tenant’s overall business. We believe the risk-adjusted returns for select single-tenant office properties are compelling and offer attractive investment yields, rental rates at or below prevailing market rental rates and an investment basis below replacement cost. Based on our senior management team’s experience, we believe single-tenant office properties often have less buyer competition. In addition, we believe that long-term property tenants who have consistently invested their own capital into their leased premises are less likely to vacate the property and the risk of significant capital investment to re-lease the property is reduced. We believe that certain of the single-tenant office properties in our initial portfolio provide the opportunity for increased rents to higher market rent levels at the end of their lease terms.

Our initial portfolio is comprised of single-tenant retail and office properties located in or in close proximity to major MSAs, growth markets and other markets in the United States with favorable economic and demographic conditions and leased to tenants with favorable credit profiles or performance attributes. All of the properties in our initial portfolio are subject to long-term, primarily triple-net leases, which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures. As of September 30, 2019, our initial portfolio of 20 properties had annualized base rent of $12.5 million and was 100% occupied.

properties in these markets will allow our senior management team to utilize its real estate expertise to increase the value of our properties and may present us with opportunities to achieve higher values and returns through redevelopment or re-tenanting alternatives in the future.

Within these markets, we emphasize investments in retail and office properties that offer attractive risk-adjusted investment returns. We target properties net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their market and have rent levels at or below market rent levels.

As of September 30, 2019, leases contributing 82% of annualized base rent were triple-net, which means that the tenant is responsible for substantially all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property (including any increases in those costs that may occur as a result of inflation). Our remaining two leases were “base stop” leases, where the tenant is responsible for the increase in operating expenses over the base year, but we retain responsibility for operating expenses during the base year. Also, we will incur property-level expenses associated with our properties should they become vacant in the future and occasionally incur nominal property-level expenses that are not paid by our tenants, such as the costs of periodically making site inspections of the properties. We do not currently anticipate incurring significant capital expenditures or property costs. Since our initial properties are single-tenant properties, all of which are under long-term leases, we do not expect to perform significant leasing activities on our properties in the foreseeable future. As of September 30, 2019, the weighted average remaining term of our leases was 8.2 years (based on annualized base rent and excluding renewal options that have not been exercised, which are exercisable at the option of our tenants upon initial expiration of the base lease term), with none of the leases expiring prior to January 31, 2024.

Factors that May Influence Our Operating Results

Rental Revenue

Our revenues are generated predominantly from receipt of rental revenue. Our ability to grow rental revenue will depend primarily on our ability to acquire additional properties and realize the rental escalations built into our leases. As of September 30, 2019, leases contributing approximately 31.8% of the annualized base rent of our initial portfolio provided for increases in future annual base rent ranging from 1.0% to 2.5% annually, with a weighted average annual escalation equal to approximately 1% of base rent. In addition, as of September 30, 2019, leases contributing approximately 22.4% of our annualized base rent provided for increases in future annual base rent ranging from 5.0% to 10.0% every five years, with a weighted average annual escalation equal to 2% of base rent.

Without giving effect to the exercise of tenant renewal options, the weighted average remaining term of the leases as of September 30, 2019 was 8.2 years (based on annualized base rent). None of our leases expire prior to January 31, 2024. See “Business and Properties—Our Real Estate Investment Portfolio—Lease Expirations.” The stability of the rental revenue generated by our properties depends principally on our tenants’ ability to pay rent and our ability to collect rents, renew expiring leases or re-lease space upon the expiration or other termination of leases, lease currently vacant properties and maintain or increase rental rates at our leased properties. Adverse economic conditions, particularly those that affect the markets in which our properties are located, or downturns in our tenants’ industries could impair our tenants’ ability to meet their lease obligations to us and our ability to renew expiring leases or re-lease space. In particular, the bankruptcy of one or more of our tenants could adversely affect our ability to collect rents from such tenant and maintain our portfolio’s occupancy.

Our Triple-Net Leases

We generally expect to lease our properties to tenants pursuant to long-term, triple-net leases that require the tenant to pay all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property. As of September 30, 2019, leases contributing 82% of the annualized base rent of our initial portfolio were triple-net. In most instances, the leases require us to incur costs to repair the roof or parking lot of our properties, and while those instances have not historically resulted in significant costs to us, an increase in costs related to these responsibilities could negatively influence our operating results. Similarly, an increase in the vacancy rate of our portfolio would increase our costs, as we would be responsible for costs that our tenants are currently required to pay.

Interest Expense

We do not expect to have any outstanding indebtedness upon completion of this offering and the formation transactions. Any changes to our debt structure, including from borrowings under the revolving credit facility that we expect to utilize to complete future property acquisitions, could materially influence our operating results depending on the terms of any such indebtedness.

General and Administrative Expenses

We do not expect the general and administrative expenses reflected on the historical statement of operations of Alpine Income Property Trust Predecessor to be reflective of the costs we will incur pursuant to the management agreement with our Manager and our expected professional and consulting fees, portfolio servicing costs and other general and administrative expenses. As a public company, we estimate our annual general and administrative expenses will approximate $4.3 million, which amount includes, among other things, the base management fee that we will pay our Manager, non-cash compensation expense for stock grants awarded to our independent directors and $1.3 million to $1.5 million for legal, insurance, accounting and other expenses related to corporate governance, SEC reporting and other compliance matters. In addition, while we expect that our general and administrative expenses will rise in some measure as our portfolio grows, we expect that such expenses as a percentage of our portfolio will decrease over time due to efficiencies and economies of scale.

Impact of Inflation

Our leases typically contain provisions designed to mitigate the adverse impact of inflation on our results of operations. Since tenants are typically required to pay all property operating expenses, increases in property-level expenses at our leased properties generally do not adversely affect us. However, increased operating expenses at vacant properties and the limited number of properties that are not subject to full triple-net leases could cause us to incur additional operating expense. Additionally, our leases generally provide for rent escalators (see “—Rental Revenue” above) designed to mitigate the effects of inflation over a lease’s term. However, since some of our leases do not contain rent escalators and many that do limit the amount by which rent may increase, any increase in our rental revenue may not keep up with the rate of inflation.

Comparison of Alpine Income Property Trust Predecessor’s Operating Results For the Nine Months Ended September 30, 2019 and 2018

Revenue and Direct Cost of Revenues

Total revenue from our income property operations was approximately $9.4 million and $8.8 million during the nine months ended September 30, 2019 and 2018, respectively, an increase of approximately $591,000. The direct costs of revenues for our income property operations totaled

approximately $1.1 million for the nine months ended September 30, 2019 and 2018, respectively. The increase in the total revenues during the nine months ended September 30, 2019 of approximately $591,000, or approximately 7%, from the nine months ended September 30, 2018, reflects approximately $523,000 of increased revenue from the five properties acquired during the nine months ended September 30, 2019 as well as approximately $339,000 from the acquisition of two ground leases in Jacksonville, Florida in October 2018. The increase in the direct cost of revenues of approximately $74,000, or approximately 7%, is primarily related to common area maintenance costs incurred related to the acquisition of two ground leases in Jacksonville, Florida in October 2018.

Depreciation and Amortization

Depreciation and amortization expense totaled approximately $3.9 million and $3.6 million during the nine month periods ended September 30, 2019 and 2018, respectively, an increase of approximately $303,000, or approximately 8%. The majority of the increase, approximately $249,000, is attributable to the depreciation and amortization recognized on the five properties acquired during the nine months ended September 30, 2019.

General and Administrative Expenses

General and administrative expenses reflected in the statement of operations for the nine-month period ended September 30, 2019 and 2018 is an allocated expense from the parent company of our predecessor entity. Consequently, the allocated general and administrative expense which totaled approximately $1.4 million and $967,000 for the nine months ended September 30, 2019 and 2018, respectively, does not reflect an increase of expenses directly attributable to the predecessor portfolio and thus our operations, but rather an increase of the parent company expenses.

Net Income

Net income totaled approximately $2.9 million and approximately $3.2 million during the nine months ended September 30, 2019 and 2018, respectively, a decrease of approximately $235,000, or approximately 7%. The decreased net income reflects an increase in revenue of approximately $591,000 noted above, offset by the increase in direct costs of revenues of approximately $74,000 noted above, as well as increased general and administrative expenses as described above, and an increase in depreciation and amortization expense of approximately $303,000.

Comparison of Alpine Income Property Trust Predecessor’s Operating Results For the Years Ended December 31, 2018 and 2017

Revenue and Direct Cost of Revenues

Total revenue from our income property operations was approximately $11.7 million during the year ended December 31, 2018 and approximately $8.5 million in the same period in 2017, a variance of approximately $3.3 million, or approximately 39%. The direct costs of revenues for our income property operations totaled approximately $1.6 million and approximately $1.5 million for the years ended December 31, 2018 and 2017, respectively, an increase of approximately $151,000, or approximately 10%. The increase in the total revenues in the year ended December 31, 2018 of approximately $3.3 million versus 2017, reflects the revenue for a full year from our acquisition of the single-tenant office property in Hillsboro, Oregon, which we acquired in October 2017 and two single-tenant retail properties we acquired in April of 2017. The increase in the direct cost of revenues of approximately $151,000, or approximately 10%, relates to the expenses for a full year from our acquisition of the aforementioned acquisitions in April and October of 2017.

Depreciation and Amortization

Depreciation and amortization expense totaled approximately $4.9 million and $3.1 million during the years ended December 31, 2018 and 2017, respectively, an increase of approximately $1.8 million, or approximately 60%. The majority of the increase, approximately $1.6 million, is attributable to the increase in depreciation and amortization recognized on the single-tenant office property in Hillsboro, Oregon, which we acquired in October 2017, therefore, the year ended December 31, 2018 reflects the depreciation and amortization expense for a full year versus a partial year in 2017.

General and Administrative Expenses

General and administrative expenses reflected in the statement of operations for the years ended December 31, 2018 and 2017 is an allocated expense from the parent company of our predecessor entity. Consequently, the allocated general and administrative expense, which totaled approximately $1.2 million and approximately $829,000 for the years ended December 31, 2018 and 2017, respectively, does not reflect an increase of expenses directly attributable to the predecessor portfolio and thus our operations, but rather an increase of the parent company’s expenses.

Net Income

Net income totaled approximately $4.0 million during the year ended December 31, 2018 and approximately $2.8 million during the same period in 2017, an increase of approximately $1.2 million, or approximately 43%. The increased net income reflects the increased revenue of approximately $3.3 million, offset by the approximately $151,000 increase in the direct cost of revenues, each variance relating to the acquisitions in 2017 noted above, offset by increased general and administrative expenses and an increase in depreciation and amortization expense of approximately $1.8 million.

Liquidity and Capital Resources

Alpine Income Property Trust Predecessor’s total cash balance at September 30, 2019 and December 31, 2018, reflected an allocation of the cash balance of CTO at such date. We will not acquire any of the cash of CTO in connection with our acquisition of our initial portfolio from CTO.

As of September 30, 2019, and as of December 31, 2018, the Company had no outstanding indebtedness.

Initially we expect to utilize the available capacity under the anticipated revolving credit facility and cash from operations to fund our future acquisitions.

Capital Expenditures. We generally have no contractual requirements to make capital expenditures other than our responsibility for the roof or parking lot of most of our triple-net leases.

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance and anticipated debt service requirements under the revolving credit facility over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations and the available borrowing capacity on the revolving credit facility, based on the borrowing base of properties, which we expect to execute at or near this offering.

Our board of directors and management will periodically review the allocation of capital with the goal of providing the best long-term return for our stockholders. These reviews will consider various alternatives, including our dividend policy. Our board of directors will review our business plan and corporate strategies and make adjustments as circumstances warrant.

Our Anticipated $100 Million Revolving Credit Facility

A group of lenders, for whom Bank of Montreal will act as administrative agent, and which includes affiliates of BMO Capital Markets Corp. and Raymond James & Associates, Inc., have provided commitments for a senior unsecured revolving credit facility, allowing borrowings of up to $100 million. We expect the revolving credit facility to be available to us concurrently with the completion of this offering and have a term of four years, with the ability to extend the term for one year. We also expect the revolving credit facility to have an accordion feature that may allow us to increase the availability under the revolving credit facility by an additional $50 million, subject to meeting specified requirements and obtaining additional commitments from lenders. We expect that the indebtedness outstanding under the revolving credit facility will accrue interest at a rate ranging from the 30-day LIBOR plus 135 basis points to the 30-day LIBOR plus 195 basis points based on the total balance outstanding under the revolving credit facility as a percentage of our total asset value, as follows:


Total Debt / Total Asset Value		LIBOR Margin
Equal to or less than 45%		1.35%
Greater than 45%; less than or equal to 50%		1.50%
Greater than 50%; less than or equal to 55%		1.65%
Greater than 55%		1.95%

We expect that, notwithstanding the foregoing, the maximum amount of indebtedness that will be permitted under the revolving credit facility will be an amount equal to 60% of our total asset value.

We will be subject to customary restrictive covenants under the revolving credit facility, including, but not limited to, limitations on our ability to: (a) incur indebtedness; (b) make certain investments; (c) incur certain liens; (d) engage in certain affiliate transactions; and (e) engage in certain major transactions such as mergers. In addition, we will be subject to various financial maintenance covenants under the revolving credit facility including, but not limited to, a maximum indebtedness ratio, a maximum secured indebtedness ratio and a minimum fixed charge coverage ratio. Our failure to comply with these covenants or the occurrence of an event of default could result in acceleration of our debt and other financial obligations under the revolving credit facility.

We intend to use the revolving credit facility for general corporate purposes, including the funding of potential future acquisitions.

The commitments are subject to closing conditions that include, among other things, successful completion of this offering, payment of fees and the execution and delivery of definitive documentation satisfactory to the lenders. There can be no assurance that all of the closing conditions will be satisfied.

Non-GAAP Financial Measures

Our reported results are presented in accordance with GAAP. We also disclose FFO and AFFO both of which are non-GAAP financial measures. We believe these two non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.

FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, amortization of capitalized lease incentives and above- and below-market lease related intangibles, and non-cash compensation. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies.

The following table reconciles net income (which we believe is the most comparable GAAP measure) to FFO and AFFO:


	Nine Months Ended September 30,									Year Ended December 31,
	2019 (Pro Forma) (Unaudited)			2019 (Historical) (Unaudited)			2018 (Historical) (Unaudited)			2018 (Pro Forma) (Unaudited)			2018 (Historical)			2017 (Historical)

Net Income	$	1,812,287		$	2,925,819		$	3,160,343		$	2,374,237		$	4,014,955		$	2,812,769

Depreciation and Amortization		4,267,106			3,946,794			3,643,709			5,689,476			4,900,719			3,057,346


Funds from Operations		6,079,393			6,872,613			6,804,052			8,063,713			8,915,674			5,870,115

Adjustments:

Straight-Line Rent Adjustment		(417,136	)		(335,982	)		(342,939	)		(618,424	)		(450,566	)		(384,055	)

Non-Cash Compensation		120,000			438,603			225,883			160,000			232,426			136,536

Amortization of Deferred Loan Costs to Interest Expense		129,375			—			—			172,500			—			—

Amortization of Intangible Assets and Liabilities to Lease Income		(157,773	)		(193,018	)		(169,363	)		(210,363	)		(229,329	)		(165,973	)

Amortization of Deferred Expenses to Lease Income		—			226,823			226,823			—			302,431			50,405


Adjusted Funds from Operations	$	5,753,859		$	7,009,039		$	6,744,456		$	7,567,426		$	8,770,636		$	5,507,028

Critical Accounting Policies

The financial statements included in this registration statement are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. The development and selection of these critical accounting policies have been determined by us through our Manager. Actual results could differ from those estimates.

The most critical accounting policies, which involve the use of estimates and assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows:

Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period presented. Actual results could differ from those estimates.

Because of, among other factors, the fluctuating market conditions that currently exist in the national real estate markets, and the volatility and uncertainty in the financial and credit markets, it is possible that the estimates and assumptions, most notably those related to the Company’s investment in income properties, could change materially due to the continued volatility of the real estate and financial markets or as a result of a significant dislocation in those markets.

Real Estate Investments. Real Estate, which is primarily comprised of the income properties in our portfolio, is stated at cost, less accumulated depreciation and amortization. Such income properties are depreciated on a straight-line basis over their estimated useful lives. Renewals and betterments are capitalized to the applicable income property accounts. The cost of maintenance and repairs is expensed as incurred. The cost of property retired or otherwise disposed of, and the related accumulated depreciation or amortization, are removed from the accounts, and any resulting gain or loss is recorded in the statement of operations.

Long-Lived Assets. The Company follows FASB ASC Topic 360-10, Property, Plant, and Equipment in conducting its impairment analyses. The Company reviews the recoverability of long-lived assets, primarily real estate, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of situations considered to be triggering events include: a substantial decline in operating cash flows during the period, a current or projected loss from operations, an income property not fully leased or leased at rates that are less than current market rates, and any other quantitative or qualitative events deemed significant by our management. Long-lived assets are evaluated for impairment by using an undiscounted cash flow approach, which considers future estimated capital expenditures. Impairment of long-lived assets is measured at fair value less cost to sell.

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the option whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Income Property Lease Revenue. The rental arrangements associated with the Company’s income property portfolio are classified as operating leases. The Company recognizes lease income on these properties on a straight-line basis over the term of the lease. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between lease income recognized under this method and contractual lease payment terms (i.e., straight-line rent) is recorded as a deferred operating lease receivable and is included in Straight-line Rent Adjustment on the Company’s combined balance sheets for the years ended December 31, 2018 and 2017.

The collectability of income property portfolio tenant receivables and straight-line rent adjustments is determined based on, among other things, the aging of the tenant receivable, management’s evaluation of credit risk associated with the tenant and industry of the tenant, and a review of specifically identified accounts using judgment. As of December 31, 2018, and 2017, no allowance for doubtful accounts was required.

Deferred Expenses. Deferred expenses include tenant lease incentives and leasing costs such as brokerage commissions, legal, and other costs which are amortized over the term of the respective lease agreements. Tenant lease incentives are amortized as an offset to operating lease income while leasing costs are amortized and included in depreciation and amortization in the Company’s combined statements of operations.

Income Taxes. The Company has in effect an election to be taxed as a pass-through entity under subchapter S of the Code, but intends to revoke its S election prior to the closing of this offering. The Company intends to elect to be taxed as a REIT for U.S. federal income tax purposes commencing with its short taxable year ending December 31, 2019, and believes that its organization and proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT commencing with such taxable year. As such, the combined financial statements of the Company have been prepared as if the Company qualified as a REIT for the periods presented. As a REIT, the Company will be subject to U.S. federal and state income taxation at corporate rates on its net taxable income; the Company, however, may claim a deduction for the amount of dividends paid to its stockholders. Amounts distributed as dividends by the Company will be subject to taxation at the stockholder level only. While the Company must distribute at least 90% of its REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, to qualify as a REIT, the Company intends to distribute all of its net taxable income, if any, and eliminate U.S. federal and state income taxes on undistributed net taxable income. The Company is allowed certain other non-cash deductions or adjustments, such as depreciation expense, when computing its REIT taxable income and distribution requirement. These deductions permit the Company to reduce its dividend payout requirement under U.S. federal income tax laws. Certain states may impose minimum franchise taxes. The Company may form one or more TRSs, which will be subject to applicable U.S. federal, state and local corporate income tax on their taxable income. For the periods presented, the Company did not have any TRSs that would be subject to taxation.

New Accounting Pronouncements. For a description of the impact of new accounting pronouncements on our financial statements, refer to Note 3 in the Notes to Combined Financial Statements for the years ended December 31, 2018 and 2017.

Off-Balance Sheet Arrangements

As of September 30, 2019, Alpine Income Property Trust Predecessor did not have any off-balance sheet arrangements.

MARKET OPPORTUNITY

Unless otherwise indicated, the following information is based upon a report prepared for us by RCG.

Employment and Demographic Overview

The U.S. economic expansion continued through the first half of 2019, bolstered by business deregulation, increased consumer spending, income growth and continued accommodative monetary policy. In total, U.S. employers created more than 2.2 million nonfarm jobs during the 12 months ended July 31, 2019, a slight moderation as compared with the nearly 2.7 million nonfarm jobs that U.S. employers created during the year ended December 31, 2018. Economic growth during 2018 was fueled in part by tax cuts, and the pace of hiring during 2018 was slightly faster than the pace of hiring in 2017. In total, the U.S. added nearly 12.9 million jobs during the five-year period ended December 31, 2018.

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With the economy near full employment, private sector employers added an average of 157,000 jobs per month in the first seven months of 2019, a moderate growth rate that was generally consistent with the pace of labor force growth over the same period. Hiring remained broad-based across a wide range of industries and was spread across the country. Tight labor market conditions constrained employment growth in some regions, while private sector hiring was generally strongest in regions with robust population and labor force growth, particularly in the South and West.

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Consistent with continued job growth and the broad strength of the U.S. economy in recent years, U.S. labor market conditions remain particularly tight. The national unemployment rate reached 3.7% as of July 31, 2019, near the lowest unemployment rate in 50 years, and was relatively unchanged in recent months. Tight labor market conditions are supporting accelerating wage growth across a wide range of industries, as well as robust consumer spending. As of June 30, 2019, wage growth reached 3.9% year-over-year, according to the Federal Reserve Bank of Atlanta.

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The U.S. population increased by approximately two million people year-over-year to more than 327 million as of July 1, 2018, according to the U.S. Census Bureau. During the five-year period ended July 1, 2018, the national population increased by 11.1 million. Combined with sustained population growth, favorable economic conditions fueled steady household formation, and RCG estimates that new household formation in the U.S. reached 1.5 million at the end of 2018. The growth in U.S. population and number of new households in the U.S. provides a growing demand base for consumer goods and services.

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As of June 30, 2019, national real disposable personal income increased by 3.2% year-over-year, which contributed to 3.3% growth in total U.S. retail sales, excluding motor vehicles, during the same period. Looking ahead, RCG expects that population growth and household formation, as well as job creation and wage growth, in the U.S. should continue to bolster consumer spending, business activity and commercial real estate tenant demand across a range of commercial real estate sectors, including the single-tenant, net lease market.

Single-Tenant, Net Lease Real Estate Market

The single-tenant, net lease market has expanded steadily over the last several years, and investor demand for net leased properties continued to gain momentum into 2019. Unlike a gross lease, which places the financial responsibility for most expenses with the property owner, the net lease structure shifts the majority or entirety of expenses for property taxes, insurance, maintenance and often utilities and capital expenditures, to the lessee, in addition to rent payments. Net leases are generally executed for an initial term of 10 to 15 years, but 20 and 25 year leases are not uncommon. Lease agreements often include multiple options for the tenant to extend, and may include terms for periodic rent increases. Comparatively, multi-tenant commercial real estate properties under gross leases often have average initial lease terms between five and ten years with shorter or fewer options to extend. Rent escalation is also commonly embedded in the net lease terms as a specified percentage increase of existing rent per year, or determined by reference to an inflation measure such as the Consumer Price Index. With cash flows that are intended to be passive, stable and paid at regular intervals, net leased real estate is similar, in many ways, to interest-bearing corporate bonds, but with the additional potential for appreciation in the value of the underlying property.

Types of Net Leased Properties

Single-tenant, net leased properties span across all the major business property types. Longer lease terms associated with net leased properties are ideal for tenants that desire to preserve locations pivotal to business success, including properties in key retail corridors, which capture foot traffic and are proximate to a key customer base, facilities along prime distribution networks with access to transportation infrastructure, flagship facilities which are integral to operations, and corporate regional or headquarters offices.

Because net lease terms generally exceed ten years, property owners typically seek tenants with solid business platforms and stable growth prospects, which may be better protected from economic cycles. The strength of the tenant is critical for owners in determining lease quality. As such, net lease tenants are often corporations or national brands with healthy balance sheets and established credit ratings. Net leased property owners also commonly focus on industries with stable underlying demand drivers, which are less prone to volatility and therefore better positioned to withstand economic downturns. For example, businesses providing necessity-based and lower-priced products and services that businesses and consumers often rely on regardless of economic fluctuations can help insulate a tenant from closing locations and provide a steady rent stream to net leased property owners even in down cycles. Finally, with the fast pace of innovation reshaping the real estate market, tenants most shielded from the effects of e-commerce are also desirable from a landlord perspective for long-term net lease transactions. Tenants in businesses and property segments which potentially have greater stability across economic cycles and lower exposure to changing technology, include:

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necessity-based retail such as convenience stores, grocery stores, pharmacies, car washes and gas stations, which are not only more e-commerce-resistant because they serve daily neighborhood needs, but may also benefit from ongoing demand through economic cycles;

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budget-friendly retail segments such as discount retailers and fast food establishments, which generally are more resilient than higher-end retail segments during recessionary periods;

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experiential/lifestyle segments such as fitness centers, theaters, personal services and casual dining, which are less likely to be replicated via e-commerce sales channels;

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net lease offices, such as regional or headquarters locations for major corporations, which typically have greater stability given tenant creditworthiness and company commitments to long-term leases; and

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health-related businesses, such as medical practices and other health services, which serve ongoing needs of the local community.

Net Lease Structure Benefits

The net lease structure offers several benefits to both lessees and landlords. Tenants are able to control advantageous locations for longer periods while preserving or extracting capital for core business operations in order to expand. In many cases, the net lease structure provides opportunities for tenants to expand their corporate footprint without the capital required to purchase or develop real estate. In addition, sale-leaseback transactions can represent an efficient and economical way for an owner-occupier of real estate to raise capital, expand into new business ventures or reinvest into core business activities. For property owners, the nature of the net lease structure can create a long-term, reliable income stream, providing stability and reducing risk through economic cycles. More specifically, advantages of the net lease structure for landlords may include:

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Income Stability: The long lease term, pre-determined rent structure and credit tenant profile of many net leased properties create the potential for stable and predictable cash flows over an extended investment horizon. Because lease duration is significantly longer than an average gross lease, and operating expenses are minimal, net leased real estate can generate a consistent and predictable income stream for property owners. Moreover, tenants with strong balance sheets, which are often characteristic of lessees of net leased properties, can reduce fluctuations in property performance associated with re-tenanting as compared with multi-tenant properties. The primary risk in owning net leased real estate may be the creditworthiness of the tenant. Information regarding a tenant’s credit history is often accessible, however, enabling the landlord to determine corporate debt repayment history or rating and manage vacancy risk. Additionally, the often strategic locations of net leased properties can motivate tenants to exercise extension options or renew leases at the expiration of the lease term in order to preserve market share associated with locational advantages. Many retailers, restaurants and hotels, for example, are tied to specific locations in order to draw a specific customer base and to compete with other brands.

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Inflation Hedging: The structure of net leases can provide inflation-mitigating benefits for property owners as leases typically contain rent escalators that allow for rent increases at specific time periods, which can help to mitigate the effects of inflation. Additionally, landlords are shielded from the rising costs of property operating expenses, which are typically borne by the net lease tenant.

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Protection from Economic Volatility: In addition to inflation hedging, the longer terms of net leases can also offer protection against short-term economic volatility relative to shorter term gross leases. Since lease terms can range from 10 to 25 years, short-term movements in market-rate contract rents typically have a minimal effect on income from a net leased property. Reflecting this resilience to volatility, as shown below, rent growth for net-leased properties remained positive throughout the economic downturn in 2008 and 2009, while average rents fell among nearly all other major commercial property types.

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Investor Mix and Growth of the Net Lease Market

Market Fragmentation

The net lease market is highly fragmented and decentralized. Although there are a number of larger non-traded and publicly traded REITs that invest in net leased properties, most single-tenant, net leased properties are owned by smaller investors, such as individuals, families, trusts and real estate operating companies, each of which holds relatively few properties. Reflecting the fragmented nature of the market, net lease market information is comparatively limited, which makes the overall size and fundamentals of the market difficult to quantify, track and analyze, particularly in smaller markets. The lack of information can create pricing opportunities and may be a significant advantage to well-capitalized firms with real estate market expertise and the financial resources to move quickly to acquire new properties or portfolios.

Growth of the Net Lease Market

Growth of the net lease market depends upon several factors, including net lease tenants opening new locations across a wide range of industries, such as retail, entertainment, personal services, food services, distribution centers, medical service providers, as well as corporate offices. In particular, growth among retail stores that have been resilient to e-commerce, such as experiential retail, discount and convenience stores, restaurants, gyms and pharmacies, can provide new net lease opportunities, support new real estate development and expand the universe of investable net leased properties. Similarly, the trend of healthcare industry tenants offering services from former retail spaces may provide redevelopment opportunities that significantly add to the pool of net leased properties.

The net lease market is also influenced by owner-occupiers selling and leasing back properties through sale-leaseback transactions as a means to raise capital or support business expansion by

reallocating capital previously invested in real estate into core business activities. RCG estimates the total value of owner-occupied commercial real estate in the U.S. to be $1.5 to $2.0 trillion. As such, RCG believes there is considerable potential for sale-leaseback transactions to increase the overall size of the net lease market.

Additionally, in 2017, Congress established new tax incentives for investments in more than 8,700 designated opportunity zones around the country. RCG believes that increased residential and commercial development in these areas in the coming years should support population growth and increased economic activity and bolster demand for a wide range of businesses, including many potential net lease properties.

While the evolving market makes the precise size of the net lease market challenging to measure, RCG believes that the net lease market remains well positioned to accommodate a substantial amount of increased net lease investment activity from growth in consumer spending and business activity across a wide range of industries, new development of net leased properties, sale-leaseback transactions and potential increased residential and commercial development in opportunity zones.

Opportunities from Secular Shifts

Long-term drivers, including demographic shifts, changing consumer preferences and technological innovation, are having a significant impact on the way consumers, employers and businesses utilize real estate. RCG believes several of these trends could generate additional tenant demand for net leased properties. As e-commerce volume grows, retailers are increasingly using storefronts for last-mile delivery, making strategically located retail properties even more desirable. Long-term net leased properties in well-located population centers may be a desirable option for retailers looking to preserve locations integral to consumer distribution. E-commerce is also expected to continue to fuel growth in large warehouse/distribution facilities, driving demand for specialized, build-to-suit solutions, which are conducive to the single-tenant, net lease structure. Single-tenant properties which typically give tenants control over the design of their workplaces and make long-term capital expenditures in highly amenitized spaces more viable could also favor net lease structures.

Capital Environment

Investment Volume

While it is difficult to accurately assess the total volume of investment in net leased real estate properties, transaction activity for single-tenant properties can be a useful proxy, as a large number of these transactions represent net leased properties. Single-tenant investment activity reached an annualized pace of $49.9 billion as of June 30, 2019, down somewhat from the recent peak of $58.4 billion in 2018, but on pace with the average investment activity of more than $49.0 billion per year from 2015 through 2018. During the five-year period ended December 31, 2018, single-tenant investment activity totaled $236.7 billion, or more than $47.3 billion per year on average. The elevated level of investment in the net lease real estate segment continues to be largely driven by the potential for income stability combined with appreciation of underlying property values.

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Capitalization Rate Trends

Reflecting the elevated level of investor demand, transaction-based capitalization rates for single-tenant properties decreased significantly through the current cycle and have remained near historical lows in the 6-7% range for the past several years. The stable capitalization rate trend highlights the continued inflow of capital into the single-tenant and net lease real estate segments.

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However, compared with sovereign and corporate bond yields, the spread to single-tenant capitalization rates remained relatively wide. Through June 30, 2019, the single-tenant capitalization rate spread to BBB corporate bond yields increased to 238 basis points, compared with the average of 179 basis points from 2001 through June 30, 2019. Similarly, the single-tenant capitalization rate spread to the 10-year Treasury yield increased to 429 basis points as of June 30, 2019, wider than the average from 2001 through June 30, 2019 of 405 basis points, and significantly wider than during the previous growth cycle in the mid-2000s. If single-tenant capitalization rates remain relatively stable despite continued downward movement of bond yields, the spread would widen, highlighting the potential opportunity for attractive risk-adjusted returns.

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BUSINESS AND PROPERTIES

Our Company

We are a newly organized real estate company that owns and operates a high-quality portfolio of single-tenant commercial properties. All of the properties in our initial portfolio are leased on a long-term basis and located primarily in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. Eighteen of the 20 properties in our initial portfolio, representing approximately 82% of our initial portfolio’s annualized base rent (as of September 30, 2019), are leased on a triple-net basis. Our properties are primarily leased to industry leading, creditworthy tenants, many of which operate in industries we believe are resistant to the impact of e-commerce. Our initial portfolio consists of 20 single-tenant, primarily net leased retail and office properties located in 15 markets in ten states, which we acquired from CTO in our formation transactions utilizing approximately $125.9 million of proceeds from this offering and the concurrent CTO private placement and 1,223,854 OP units that have an initial value of approximately $24.5 million based on the assumed public offering price of $20.00, which is the mid-point of the price range set forth on the front cover of this prospectus. For two of our properties in our initial portfolio, we are the lessor in a long-term ground lease to the tenant. We are externally managed by our Manager, a wholly-owned subsidiary of CTO. Concurrently with the closing of this offering, CTO will invest $7.5 million in exchange for shares of our common stock at a price per share equal to the public offering price per share in this offering. Upon completion of this offering, the concurrent CTO private placement and the formation transactions, CTO will own approximately 17.6% of our outstanding common stock (assuming the OP units to be issued to CTO in the formation transactions are exchanged for shares of our common stock on a one-for-one basis).

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Attractive Locations. The 20 properties in our initial portfolio represent approximately 817,000 gross rentable square feet, are 100% occupied and are primarily located in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. Approximately 82% of our initial portfolio’s annualized base rent as of September 30, 2019 was derived from

properties (i) located in MSAs with populations greater than one million and unemployment rates less than 3.6% and (ii) where the mean household income within a three-mile radius of the property is greater than $88,000.

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Creditworthy Tenants. Approximately 38.2% of our initial portfolio’s annualized base rent as of September 30, 2019 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency. Our largest tenant, Wells Fargo N.A., has an ‘A+’ credit rating from S&P Global Ratings and contributed approximately 25.0% of our initial portfolio’s annualized base rent as of September 30, 2019.

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Geographically Diversified. Our initial portfolio is occupied by 16 tenants across 15 markets in ten states. Our largest property, as measured by annualized base rent, is located in the Portland, Oregon MSA.

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100% Occupied with Long Duration Leases. Our initial portfolio is 100% leased and occupied. The leases in our initial portfolio have a weighted average remaining lease term of approximately 8.2 years (based on annualized base rent as of September 30, 2019), with none of the leases expiring prior to January 31, 2024.

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Contractual Rent Growth. Approximately 54.2% of the leases in our initial portfolio (based on annualized base rent as of September 30, 2019) provide for increases in contractual base rent during the current term. In addition, approximately 84% (based on annualized base rent as of September 30, 2019) of the leases in our initial portfolio allow for increases in base rent during the lease extension periods.

Our Competitive Advantages

We believe our strategy and structure provide us with competitive advantages as a newly formed REIT focused on single-tenant, net leased properties.

Positioned for Growth

Experienced Management

Acquisitions Under Evaluation

Third-Party Acquisitions Under Evaluation

Acquisition Opportunities from CTO

Our exclusivity and ROFO agreement requires CTO, prior to seeking to sell any of CTO’s single-tenant, net leased properties (whether now owned or developed and owned by CTO in the future) to a third party, to first offer to us the right to purchase any such property. As of November 1, 2019, CTO’s portfolio of single-tenant income properties, excluding the properties that are being sold or contributed to us in the formation transactions, consists of 29 single-tenant, net leased properties located in 11 states representing approximately 1.3 square feet of leasable area and has a weighted-average remaining lease term as of November 1, 2019 of 13.8 years.

Our exclusivity and ROFO agreement with CTO also precludes CTO from acquiring any single-tenant, net leased properties after the closing of this offering unless CTO first offers that

opportunity to us and our independent directors decline to pursue the opportunity. However, this restriction will not apply to any single-tenant, net leased property that (i) was under contract for purchase by CTO or an affiliate of CTO as of the closing date of this offering, where such contract is not assignable to us and, despite commercially reasonable efforts by CTO, the seller will not agree to an assignment of the contract to us, or (ii) prior to the closing of this offering, CTO has identified or designated as a potential “replacement property” in connection with an open (i.e., not yet completed) like-kind exchange under Section 1031 of the Code.

Our Target Markets

Our initial portfolio and target markets are located primarily in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. We target markets which, among other factors, have low unemployment and/or positive employment growth and favorable population trends. We believe well-located properties in these markets will allow our senior management team to utilize its real estate expertise to increase the value of our properties and may present us with opportunities to achieve higher values and returns through redevelopment or re-tenanting alternatives in the future.

Within these markets, we emphasize investments in retail and office properties that offer attractive risk-adjusted investment returns. We intend to target, over time, a portfolio that generates 70% of its annual base rent from single-tenant retail properties and 30% of its annual base rent from single-tenant office properties. However, as of September 30, 2019, 57% of our initial portfolio’s annual base rent was generated from single-tenant retail properties and 43% of our initial portfolio’s annual base rent was generated from single-tenant office properties. We also target properties net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their market and have rent levels at or below market rent levels. In general, we intend to target properties that have a capitalization rate, measured by underwritten forward twelve months cash net operating income, between 6.5% and 7.5%.

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Investment Highlights

The following investment highlights describe what we believe are some of the key considerations for investing in our company:

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Stability and Strength of Cash Flows in our Initial Portfolio. Our 100% occupied initial portfolio provides us with stable, long-term cash flows. Our initial portfolio of 20 properties is diversified by tenant and geography with annualized base rent of approximately $12.5 million as of September 30, 2019. We have no lease expirations prior to January 31, 2024. In addition, approximately 54.2% of the leases in our initial portfolio (based on annualized base rent as of September 30, 2019) provide for increases in contractual base rent during the current term. Only four of our initial portfolio’s 16 tenants contributed more than 6% of our initial portfolio’s annualized base rent as of September 30, 2019. Our largest tenant, Wells Fargo N.A., and our second largest tenant, Hilton Grand Vacations, contributed approximately 25.0% and 18.2%, respectively, of our initial portfolio’s annualized base rent as of September 30, 2019. Our strategy targets a scaled portfolio that, over time, will:

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derive no more than 10% of the portfolio’s annualized base rent from any single tenant, irrespective of the tenant’s credit rating;

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derive no more than 10% of the portfolio’s annualized base rent from any single industry;

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derive no more than 5% of the portfolio’s annualized base rent from any single property; and

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maintain significant geographic diversification.

Although our strategy targets a scaled portfolio that, over time, meets the diversification criteria described above, as of September 30, 2019, our initial portfolio:

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had two tenants that individually contributed more than 10% of our annualized base rent;

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derived more than 10% of our annualized base rent from three industries;

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derived more than 5% of our annualized base rent from each of seven properties; and

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had significant geographic concentration in the West and South regions of the United States (as defined by the U.S. Census Bureau).

We believe portfolio diversification decreases the impact from an adverse event that affects a specific tenant or region.

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Creditworthy Tenants. As of September 30, 2019, approximately 38.2% of our initial portfolio’s annualized base rent was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency. As part of our overall growth strategy, we will seek to lease and acquire properties leased to creditworthy tenants that meet our underwriting and operating guidelines. Prior to entering into any acquisition or lease transaction, our Manager’s credit analysis and underwriting professionals will conduct a review of a proposed tenant’s credit quality based on our established underwriting methodologies. In addition, our Manager will consistently monitor the credit quality of our portfolio by actively reviewing the creditworthiness of our tenants. We anticipate that these reviews will include periodic assessments of the operating performance of each of our tenants and annual evaluations of the credit ratings of each of

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our tenants, including any changes to the credit ratings of such tenants (or the parents of such tenants) as published by a recognized credit rating agency. We believe that our Manager’s focus on creditworthy tenants will increase the stability of our rental revenue.

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Diverse Initial Portfolio. We believe that our initial portfolio is diversified by tenant and geography. Our initial portfolio is diversified with 16 tenants operating in 13 industries across 15 markets in ten states.

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Growth Oriented Balance Sheet. Upon completion of this offering and the related formation transactions, we will have no outstanding debt. We have obtained commitments for a $100 million unsecured revolving credit facility with a four year term and expect to enter into the facility concurrently with the completion of this offering. We expect that the credit facility will be available for funding future acquisitions and general corporate purposes. We intend to manage our balance sheet so that we have access to multiple sources of capital in the future that may offer us the opportunity to lower our cost of funding and further diversify our sources of capital. We intend to use leverage, in-line with industry standards, to continue to grow our net leased property portfolio.

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Platform Allows for Significant Growth. We expect to build on our senior management team’s experience in net lease real estate investing and leverage CTO’s established and developed origination, underwriting, financing, documentation and property management capabilities to achieve attractive risk-adjusted growth.

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Focused Investment Strategy. We seek to acquire, own and operate primarily freestanding, single-tenant commercial real estate properties primarily located in our target markets leased primarily pursuant to triple-net, long-term leases. Within our target markets, we will focus on investments in single-tenant retail and office properties. We will target tenants in industries that we believe are favorably impacted by current macroeconomic trends that support consumer spending, such as strong and growing employment and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the growing e-commerce retail sector. We also will seek to invest in properties that are net leased to tenants that we determine have attractive credit characteristics, stable operating histories and healthy rent coverage levels, are well-located within their market and have rent levels at or below market rent levels. Furthermore, we believe that the size of our company will, for at least the near term, allow us to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.

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•

Disciplined Underwriting Approach. The net leased properties that we target for acquisition generally will be under long-term leases and occupied by a single tenant, consistent with our initial portfolio. In addition, we may invest in properties that we believe have strong long-term real estate fundamentals (such as attractive demographics, infill locations, desirable markets and favorable rent coverage ratios), would be suitable for use by different types of tenants or alternative uses, offer attractive risk-adjusted returns and possess characteristics that reduce our real estate investment risks. In considering the potential acquisition of a property, we also evaluate how in-place rental rates compare to current market rental rates, as well as the likelihood of an increase in the rental rate upon extension of the in-place lease or re-tenanting of the property. We seek long-term leases, typically with initial lease terms of over 8 years, plus tenant renewal options. In addition, we target leases with a triple-net structure which obligates our tenants to pay all or most property-level expenses.

Strengths of Our External Manager

We will be externally managed by Alpine Income Property Manager, LLC, a wholly-owned subsidiary of CTO. CTO is a 109-year old real estate company that has been publicly-traded for 50 years and is currently listed on the NYSE American. CTO has paid an annual dividend since 1976. Our senior management team, which will be provided to us through our Manager, is led by John P. Albright, President and Chief Executive Officer of our company and CTO. Additionally, our senior management team includes: Mark E. Patten, Senior Vice President, Chief Financial Officer and Treasurer of our company and CTO; Steven R. Greathouse, Senior Vice President, Investments of our company and CTO; and Daniel E. Smith, Senior Vice President, General Counsel and Corporate Secretary of our company and CTO. Our senior management team has extensive experience running a publicly-traded real estate company including regulatory reporting, capital markets activity, investor relations and communication, compliance, stock exchange matters and cost management. Messrs. Albright, Patten and Greathouse have worked together at CTO for over seven years, and our senior management team has an average of more than 19 years of experience with public real estate companies, including REITs, as well as significant experience in leadership positions at other public companies, a Big Four public accounting firm and private real estate companies. In addition, we believe that CTO’s established public company infrastructure and expertise will help us operate efficiently as a publicly-traded company.

During their tenure at CTO, our senior management team has executed approximately $560.0 million in commercial real estate transactions. In addition, since 2012, our senior management team has disposed of more than $220 million of net leased properties generating more than $41.3 million in pre-tax gains for CTO’s shareholders. During the year ended December 31, 2018, CTO acquired 11 single-tenant, net leased properties, for purchase prices aggregating approximately $105.1 million. From January 1, 2019 through November 1, 2019, CTO completed the acquisition of ten single-tenant, net leased properties, for purchase prices aggregating approximately $102.0 million.

We believe that we will benefit from our relationship with our Manager and CTO. Our Manager will draw upon the experience and resources of the full CTO platform. CTO is a diversified real estate operating company that owns, manages and develops commercial real estate properties across the United States. Our senior management team has a deep network of relationships for sourcing net leased investments, which includes relationships within the tenant, developer and brokerage communities in several instances allowing for exclusive off-market and first-look acquisition opportunities for net leased properties. These opportunities have resulted in transactions with multiple REITs, brokerage groups and investment funds and vehicles. In addition, our senior management team has been successful in leveraging its platform to assist

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existing tenants of CTO to develop new properties or expand their existing footprint. As of November 1, 2019, CTO owned 49 single-tenant and 4 multi-tenant net leased properties with approximately 2.4 million square feet of gross leasable area, which includes the 20 single-tenant, net leased properties that will comprise our initial portfolio.

We believe that CTO’s reputation, in-depth market knowledge and extensive network of long-standing relationships in the net lease industry will provide us access to attractive investment opportunities. Additionally, concurrently with the completion of this offering and the formation transactions, we will enter into the exclusivity and ROFO agreement, pursuant to which CTO will agree, subject to certain exceptions, that it will not:

•

acquire, directly or indirectly, a single-tenant, net leased property, including any property that CTO has under contract as of the closing date of this offering, unless CTO has first offered that opportunity to us and our independent directors have declined to pursue the opportunity; and

•

enter into any agreement with any third party for the purchase and/or sale of (i) any of CTO’s remaining 29 single-tenant, net leased properties prior to seeking to sell any such properties to a third party; or (ii) any single-tenant, net leased property developed and owned by CTO or any of its affiliates after the closing date of this offering, without first offering us the right to purchase such property.

Notwithstanding the foregoing, the above-described restriction on acquisitions by CTO and its affiliates of single-tenant, net leased properties will not apply where (i) as of the closing date of this offering CTO or its affiliate has such a property under contract for purchase, (ii) such contract is not assignable to us and (iii) despite commercially reasonable efforts by CTO, the seller will not agree to an assignment of the contract to us.

See “Certain Relationships and Related Person Transactions—Exclusivity and ROFO Agreement.”

While we do not initially intend to engage in real estate development activities, we also believe that we will benefit from the real estate development expertise of our senior management team by utilizing this expertise in connection with underwriting our acquisition opportunities and with positioning and repositioning our properties to make them more attractive to existing and prospective tenants. Our senior management team has substantial experience purchasing properties with development and redevelopment potential as well as properties for direct redevelopment. We believe many of the existing net leased properties in CTO’s portfolio have imbedded value through potential re-tenanting or redevelopment, coupled with an investment basis that allows for redevelopment to achieve attractive risk-adjusted returns. The real estate development experience of our senior management team includes:

•

the construction, permitting, operation and subsequent sale of five self-developed multi-tenant office properties located on previously undeveloped land in Daytona Beach, Florida in 2016 and March 2018;

•

the acquisition of a former Publix shopping center in Winter Park, Florida that was effectively vacant and the redevelopment and lease-up of the retail center into a vibrant renovated center with a new high-performing 24 Hour Fitness as the anchor tenant and a new Wawa developed on a vacant outparcel; and

•

the purchase, entitlement and self-development of six vacant acres on the beach in Daytona Beach, Florida, into two single-tenant, net leased restaurant properties completed in January 2018.

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We also intend to leverage the vast experience and relationships that our senior management team has developed from the sale of CTO’s 10,500 acres of land along I-95 in Daytona Beach, Florida since 2012. These relationships and experience include CTO working with buyers on the design, engineering and permitting activities necessary for their end use. Notable CTO land transactions in the past six years include, but are not limited to:

•

the sale of a controlling interest in a venture that holds CTO’s remaining 5,300 acres of land for total proceeds of $97 million;

•

the sale of 76 acres for a 630,000-square foot distribution center for Trader Joes;

•

the sale of 39 acres for a 350,000-square foot outlet center for Tanger Outlets;

•

the sale of 27 acres for a 70,000-square foot fulfillment center for Amazon;

•

the sale of 18 acres for the only Sam’s Club built in the U.S. in 2019;

•

the sale of 1,600 acres for Minto’s 3,400-home development of the first ever Latitude Margaritaville;

•

the sale of nearly 100 acres for a 400,000-square foot power center developed by NADG; and

•

the sale of 35 acres for the first Buc-ee’s outside of the state of Texas.

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Our Initial Portfolio

Overview

The tables below present an overview of the properties in our initial portfolio as of September 30, 2019, unless otherwise indicated.

Property
Type

Tenant

S&P
Credit
Rating
(1)

Property Location

Rentable
Square
Feet

Lease
Expiration
Date

Remaining
Term
(Years)

Tenant
Extension
Options
(Number x
Years)

Contractual
Rent
Escalations

Annualized
Base
Rent (2)

Office

Wells Fargo

A+

Portland, OR

211,863

12/31/25

6.3

3x5

3,124,979

Office

Hilton Grand
Vacations

BB+

Orlando, FL

102,019

11/30/26

7.2

2x5

Yes

1,658,143

Retail

LA Fitness

B+

Brandon, FL

45,000

4/26/32

12.6

3x5

Yes

851,688

Retail

At Home

B+

Raleigh, NC

116,334

9/14/29

10.0

4x5

Yes

658,351

Retail

Century
Theater

Reno, NV

52,474

11/30/24

5.2

3x5

644,000

Retail

Container
Store

Phoenix, AZ

23,329

2/28/30

10.4

2x5

Yes

630,315

Office

Hilton Grand
Vacations

BB+

Orlando, FL

31,895

11/30/26

7.2

2x5

Yes

621,953

Retail

Live Nation
Entertainment,
Inc.

BB-

East Troy, WI

—

⁽³⁾

3/31/30

10.5

N/A

Yes

546,542

Retail

Hobby Lobby

N/A

Winston-Salem, NC

55,000

3/31/30

10.5

3x5

Yes

522,500

Retail

Dick’s Sporting
Goods

N/A

McDonough, GA

46,315

1/31/24

4.3

4x5

472,500

Retail

Jo-Ann Fabric

B-

Saugus, MA

22,500

1/31/29

9.3

4x5

Yes

450,000

Retail

Walgreens

BBB

Birmingham, AL

14,516

3/31/29

9.5

N/A

364,300

Retail

Walgreens

BBB

Alpharetta, GA

15,120

10/31/25

6.1

N/A

362,880

Retail

Best Buy

BBB

McDonough, GA

30,038

3/31/26

6.5

4x5

337,500

Retail

Outback

Charlottesville, VA

7,216

9/30/31

12.0

4x5

Yes

287,923

Retail

Walgreens

BBB

Albany, GA

14,770

1/31/33

13.3

N/A

258,000

Retail

Outback

Charlotte, NC

6,297

9/30/31

12.0

4x5

Yes

206,027

Retail

Cheddars⁽⁴⁾

BBB

Jacksonville, FL

8,146

9/30/27

8.0

4x5

Yes

175,000

Retail

Scrubbles⁽⁴⁾

N/A

Jacksonville, FL

4,512

10/31/37

18.1

4x5

Yes

174,400

Retail

Family Dollar

BBB-

Lynn, MA

9,228

3/31/24

4.5

7x5

160,000

Total / Wtd. Avg.

816,572

8.2

12,507,001

(1)	Tenant, or tenant parent, rated entity.

(2)	Annualized cash base rental income in place as of September 30, 2019.

(3)	The Alpine Valley Music Theatre, leased to Live Nation Entertainment, Inc., is an entertainment venue consisting of a two-sided, open-air, 7,500-seat pavilion; an outdoor amphitheater with capacity for 37,000; and over 150 acres of green space.

(4)	We are the lessor in a ground lease with the tenant. Rentable square feet represents improvements on the property that revert to us at the expiration of the lease.

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Tenant

Location

Address

Tenant
Industry / Use

Year Built /
Renovated

CTO
Purchase
Date

Square
Feet

Acres

Wells Fargo

Portland, OR

18770 NW Walker Rd., Hillsboro, OR 97006

Financial

Services

1978/2009

10/27/17

211,863

Hilton Grand Vacations

—MCC

Orlando, FL

6355 Metrowest Blvd., Orlando,

FL 32835

Hospitality

1988/2014

1/31/13

102,019

LA Fitness

Brandon, FL

2890 Providence Lakes Blvd., Brandon, FL 33511

Fitness

2006

4/28/17

45,000

At Home

Raleigh, NC

4700 Green Rd., Raleigh, NC 27604

Home Goods

1995/2014

9/29/16

116,334

Century Theater

Reno, NV

11 N. Sierra St., Reno, NV 89501

Theater

2000

11/30/16

52,474

Container Store

Phoenix, AZ

7850 W. Bell Rd., Glendale,

AZ 85308

Home
Improvement

2015

5/18/15

23,329

Live Nation
Entertainment, Inc.

East Troy, WI

2699 Country Road D, East Troy, WI 53120

Entertainment

1977

8/30/19

—

158

Hobby Lobby

Winston-Salem, NC

3775 Oxford Station Way, Winston-Salem, NC 27103

Leisure
Retailer

2015

5/16/19

55,000

Dick’s Sporting Goods

McDonough, GA

1855 Jonesboro Rd., McDonough, GA 30253

Leisure
Retailer

2006

6/15/06

46,315

Jo-Ann Fabric

Saugus, MA

1073 Broadway, Saugus, MA 01906

Leisure
Retailer

2009

4/6/17

22,500

Hilton Grand Vacations
—Cambridge

Orlando, FL

1800 Metrocenter Blvd., Orlando, FL 32835

Hospitality

2000/2014

1/31/13

31,895

Best Buy

McDonough, GA

1861 Jonesboro Rd., McDonough, GA 30253

Electronics

2006

6/15/06

30,038

Walgreens

Birmingham, AL

101 Doug Baker Blvd., Birmingham, AL, 35242

Pharmacy

2003

6/5/19

14,516

Walgreens

Alpharetta, GA

4395 Kimball Bridge Rd., Johns Creek, GA 300022

Pharmacy

2000

3/31/04

15,120

Outback

Charlottesville, VA

1101 Seminole Trail, Charlottesville, VA 22901

Casual Dine

1984

9/15/16

7,216

Walgreens

Albany, GA

2414 Sylvester Rd., Albany,

GA 31705

Pharmacy

2007

6/21/19

14,770

Outback

Charlotte, NC

16400 Northcross Dr., Huntersville, NC 28078

Casual Dine

1997

9/15/16

6,297

Cheddars⁽¹⁾

Jacksonville, FL

4954 Town Center Parkway, Jacksonville, FL 32246

Casual Dine

2017

10/4/18

8,146

Scrubbles⁽¹⁾

Jacksonville, FL

5064 Weebers Crossings Drive, Jacksonville, FL 32246

Car Wash

2017

10/4/18

4,512

Family Dollar

Lynn, MA

50 Central Ave, Lynn, MA 01901

Discount

2014

6/10/19

9,228

Total

816,572

250

(1)	Subject to a ground lease.

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Diversification by Geography

The following table details the geographical locations of the properties in our initial portfolio as of September 30, 2019:


State	Annualized Base Rent		% of Annualized Base Rent			Number of Properties		Square Feet

Alabama	$	364,300		2.9	%		1		14,516

Arizona	$	630,315		5.0	%		1		23,329

Florida	$	3,481,184		27.8	%		5		191,572

Georgia	$	1,430,880		11.5	%		4		106,243

Massachusetts	$	610,000		4.9	%		2		31,728

North Carolina	$	1,386,878		11.1	%		3		177,631

Nevada	$	644,000		5.1	%		1		52,474

Oregon	$	3,124,979		25.0	%		1		211,863

Virginia	$	287,923		2.3	%		1		7,216

Wisconsin	$	546,542		4.4	%		1		—


Total	$	12,507,001		100.0	%		20		816,572

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Lease Expirations

As of September 30, 2019, the weighted average remaining term of our leases was approximately 8.2 years (based on annualized base rent), with none of the leases expiring prior to January 31, 2024. The following table sets forth our lease expirations for leases in place as of September 30, 2019:


Lease Expiration Year (1)(2)	Annualized Base Rent		% of Base Rent			Number of Properties

2019		—		—			—

2020		—		—			—

2021		—		—			—

2022		—		—			—

2023		—		—			—

2024	$	1,276,500		10.21	%		3

2025	$	3,487,859		27.89	%		2

2026	$	2,617,596		20.93	%		3

2027	$	175,000		1.40	%		1

2028		—		—			—

2029	$	1,472,651		11.77	%		3

2030	$	1,699,357		13.59	%		3

2031	$	493,950		3.95	%		2

2032	$	851,688		6.81	%		1

2033	$	258,000		2.06	%		1

2034		—		—			—

2035		—		—			—

2036		—		—			—

2037	$	174,400		1.39	%		1

2038		—		—			—

2039		—		—			—

2040		—		—			—


Total	$	12,507,001		100.0	%		20

(1)	Expiration year of contracts in place as of September 30, 2019. Excludes any tenant option renewal periods that have not been exercised.

(2)	Assumes each tenant’s earliest right to terminate is lease expiration date.

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Our Business and Growth Strategies

Our objective is to maximize cash flow and value per share by generating stable and growing cash flows and attractive risk-adjusted returns through owning, operating and growing a diversified portfolio of high-quality single-tenant, net leased properties. Our business and growth strategy is differentiated from that of our larger peers in that we are able to focus our acquisition efforts on single-asset and small portfolio transactions which we believe will provide attractive risk-adjusted returns. We intend to pursue our objective through the following business and growth strategies:

•

Focus on Net Leased Retail and Office Properties in Major Metropolitan Areas and Growth Markets. We focus on owning, operating and investing in single-tenant, net leased retail and office properties located primarily in or in close proximity to major MSAs and in growth markets and other markets in the United States with favorable economic and demographic conditions. We also seek to invest in properties that are net leased to tenants that we determine have attractive credit characteristics and stable operating histories, or well-located infill properties with higher value redevelopment or re-tenanting alternatives, when appropriate.

•

Manage and Grow a Diverse Portfolio of High Quality Net Leased Assets. We will manage and grow our portfolio of single-tenant, net leased properties to generate sustainable, stable cash flows and maximize the long-term return on our investments. We expect to utilize the extensive real estate experience, disciplined underwriting approach and risk management expertise of our Manager and CTO. When underwriting investments, we will emphasize high-quality net leased properties, with strong operating performance, healthy rent coverage ratios and tenants with attractive credit characteristics.

General Investment and Lease Characteristics. In general, we will seek to acquire properties with or enter into leases with (i) relatively long terms (typically with initial lease terms over ten years and tenant renewal options); (ii) at or below market rental rates; (iii) attractive rent coverage ratios; (iv) meaningful rent escalations and (v) tenants that operate in industries we believe are resistant to the impact of e-commerce.

Diversification. We seek to maintain geographic and economic diversity in our properties and income streams. We believe this strategy will help mitigate the risks associated with concentrations of tenants, industries, properties or regions. Our strategy targets a scaled portfolio that, over time, will:

•

derive no more than 10% of the portfolio’s annualized base rent from any single tenant, irrespective of the tenant’s credit rating;

•

derive no more than 10% of the portfolio’s annualized base rent from any single industry;

•

derive no more than 5% of the portfolio’s annualized base rent from any single property; and

•

maintain significant geographic diversification.

Asset Management. We will regularly review each property in our portfolio in order to identify opportunities and mitigate risks in an effort to maximize stockholder value. This review will include, among other items:

•

evaluating the business performance of the tenant at the property level;

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•

evaluating the credit quality and broader business performance of the tenant;

•

assessing the local real estate market conditions and market rents relative to in-place rents;

•

monitoring concentrations within the portfolio, including with respect to credit, geography and lease term;

•

forecasting requirements for capital expenditures; and

•

determining opportunities to recycle capital through an assessment of changes in market conditions, such as tenant credit, market demographics and capitalization rates.

We will utilize CTO’s existing infrastructure and extensive expertise to monitor the credit profile of each of our tenants on an ongoing basis. We believe that this approach will enable us to proactively identify opportunities and address issues in a timely manner.

•

Manage Our Balance Sheet for Flexibility and Optimal Capital Costs. We will seek to maintain a balance sheet that strikes a prudent balance between debt and equity financing and maintains funding sources that lock in long-term investment spreads and limit exposure to interest rate volatility. We intend to target long-term leverage of six times net debt to EBITDA or less. We anticipate having access to multiple sources of capital, including an undrawn $100 million unsecured revolving credit facility that we expect to enter into concurrently with the completion of this offering. Our pro forma cash balance of $18.2 million and undrawn $100 million credit facility will provide significant initial capital for our near-term growth.

Investment Guidelines

Upon completion of this offering, our board of directors will have approved the following investment guidelines:

•

No investment will be made that would cause us to fail to qualify as a REIT under the Code.

•

No investment will be made that would cause us or any of our subsidiaries to be required to be registered as an investment company under the Investment Company Act.

•

All acquisitions of single-tenant, net leased properties from CTO or any of its affiliates must be approved by a majority of our independent directors.

Upon completion of this offering, our board of directors will have approved additional investment guidelines establishing the limits of authority for our Manager which, among other things, will stipulate that any and all acquisitions of single-tenant, net leased properties that exceed a certain investment threshold, in terms of total purchase price and/or investment yield at acquisition, will require the approval of the majority of our independent directors.

From time to time, the investment guidelines may be amended, restated, supplemented or waived without the approval of our stockholders, but with the approval of a majority of our independent directors.

Our Leases

In general, we will seek to acquire properties with or enter into leases with (i) relatively long terms (typically with initial lease terms over ten years and tenant renewal options); (ii) at or below

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market rental rates; (iii) attractive rent coverage ratios; (iv) meaningful rent escalations and (v) tenants that operate in industries we believe are resistant to the impact of e-commerce. All of the properties in our initial portfolio are subject to long-term, primarily triple-net leases, which generally require the tenant to pay all of the property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance and certain capital expenditures.

In addition, two of our properties are subject to ground leases. These leases are generally long term leases where the lessee may use or develop the property but we retain title to the land.

Underwriting

Our Manager’s strategy for investing in target properties is focused on factors including, but not limited to, long-term real estate fundamentals and target markets, including major MSAs or growth markets and other markets in the United States with favorable economic and demographic conditions. In evaluating an investment, our Manager employs a methodology which includes an evaluation of: (i) the attributes of the real estate (e.g. location, market demographics, comparable properties in the market, etc.); (ii) an evaluation of the existing tenant (e.g. creditworthiness, property level sales, tenant rent levels compared to the market, etc.); (iii) other market-specific conditions (e.g. tenant industry, job and population growth in the market, local economy, etc.); and (iv) considerations relating to our business and strategy (e.g., strategic fit of the asset type, property management needs, etc.).

Our Manager’s underwriting process evaluates comparable real estate assets in the relevant real estate market. Our Manager generally seeks to invest in real estate assets that are high quality and suitable for use by different tenants. Our Manager also seeks to rent properties at market or below-market rents to reduce vacancy risk and enhance the stability of our rental revenue. When evaluating market rents, our Manager may use market data provided by third-party real estate services firms such as CoStar Group, Inc. and Real Capital Analytics, Inc. These underwriting procedures provide our Manager with an idea of likely ranges of real estate valuation in the event a property should need to be leased to a replacement tenant.

Our Manager performs detailed credit reviews of the financial condition of all of our proposed tenants to determine their financial strength and flexibility. As part of this review, our Manager will evaluate the strength of the proposed tenant’s business at the property and at a corporate level, if applicable, and may consider the risk of tenant/company insolvency using internally developed methodologies or assessments provided by third parties. Our Manager will also consider a proposed tenant’s ability to pay the required rent pursuant to the proposed lease as well as the capital requirements needed for maintaining the property pursuant to the proposed lease. Our Manager’s assessment of the tenant’s financial condition and cash flows would not necessarily look solely to the cash flows generated by the tenant from the operations at the applicable property. The tenant’s other cash flow and capital sources would also be considered a potential resource for payment to us and represent a secondary source of our payments. Alternative tenant cash flows from sources other than the properties we own can increase the stability of our rental revenue. When appropriate, our Manager may seek credit enhancements from our tenants, such as having a tenant’s parent company or an affiliate guarantee its lease obligations to us.

Our Manager will carefully evaluate the industry in which a prospective tenant operates and the structural terms of the proposed lease. When evaluating an industry, our Manager will seek to determine relevant competitive factors and the long-term viability of the industry. We believe that by identifying macro-economic industry trends, we can better attempt to avoid investment in industries subject to long-term functional obsolescence. We believe that industry viability supports investments, residual values and investment recovery values in the event of tenant defaults.

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Asset Management

We will actively manage our portfolio to ensure tenant compliance with applicable lease agreements and to ensure that our properties are maintained. We will also attempt to limit potential defaults through consistent and ongoing monitoring of our tenants and the performance of their business operations. In the event that we determine that a particular property should be re-tenanted, we will intervene to identify an appropriate new tenant and reach agreement on a lease that meets our requirements for the property. Our active asset management will also include the identification of properties in our portfolio which we might consider for disposition, assistance in the marketing of such properties for sale and the completion of the sales process, subject to limitations imposed as a result of our status as a REIT. Following the acquisition of each property, we will continue to actively monitor the profitability of the property as well as the financial performance of each of our tenants.

Real Estate Monitoring

We will generally physically inspect every property that we acquire in connection with our initial investment. However, under certain circumstances, such as an acquisition of a large portfolio of properties, it may not be practicable for us to physically inspect each property, in which case we will rely on other due diligence procedures, such as review of financial and documentary information that may include third-party reports such as title examinations, land title surveys, environmental reports and zoning reports. We will periodically perform site inspections of our properties based on an evaluation of financial performance, unique property characteristics and industry factors and trends. We will use information gained from site visits to monitor tenant compliance with maintenance obligations and to provide a leading indicator of property-level performance trends.

Financing Strategy

Our long-term financing strategy is to maintain a prudent leverage profile that supports operational flexibility and contributes to more favorable opportunities for superior risk-adjusted returns for our stockholders. We expect to finance our operations and the acquisition and maintenance of our portfolio and other assets using several different sources, including cash from operations, proceeds from issuances of our equity and debt securities and possibly proceeds from sales of our properties. We anticipate having access to multiple sources of capital, including an undrawn $100 million unsecured revolving credit facility that we expect to enter into concurrently with the completion of this offering. Our pro forma cash balance of $18.2 million and undrawn $100 million credit facility will provide significant initial capital for our near-term growth. We intend to target long-term leverage of six times net debt to EBITDA or less.

Tax Status

Competition

The real estate business generally is highly competitive. We intend to focus on investing in commercial real estate that produces income primarily through the leasing of assets to tenants. To

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identify investment opportunities in income-producing real estate assets and to achieve our investment objectives, we compete with numerous companies and organizations, both public as well as private, of varying sizes, ranging from organizations with local operations to organizations with national scale and reach, and in some cases, we compete with individual real estate investors. In all the markets in which we compete to acquire net leased properties, price is the principal method of competition, with transaction structure and certainty of execution also being significant considerations for potential sellers. We face competition for acquisitions of real property from investors, including traded and non-traded public REITs, private equity investors and institutional investment funds, some of which have greater financial resources than we do, a greater ability to borrow funds to acquire properties and the ability to accept more risk. This competition may increase the demand for the types of properties in which we typically invest and, therefore, reduce the number of suitable investment opportunities available to us and increase the prices paid for such acquisition properties. This competition will increase if investments in real estate become more attractive relative to other forms of investment.

As a landlord, we compete in the multi-billion-dollar commercial real estate market with numerous developers and owners of properties, many of which own properties similar to ours in the same markets in which our properties are located. Some of our competitors have greater economies of scale, lower costs of capital, access to more resources and greater name recognition than we do. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose our tenants or prospective tenants and we may be pressured to reduce our rental rates or to offer substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options in order to retain tenants when our leases expire.

Employees

We are externally managed and, upon the completion of this offering, will be advised by our Manager pursuant to the management agreement between our Manager and us. All of our executive officers serve as officers of our Manager and CTO, and one of our directors, John P. Albright, serves as an officer of our Manager and an officer and director of CTO. We do not expect to have any employees. See “Our Manager and the Management Agreement—Management Agreement.”

Principal Executive Offices

Our principal offices are located at 1140 N. Williamson Blvd., Suite 140, Daytona Beach, Florida 32114. We believe that our facilities are adequate for our present and future operations.

Legal Proceedings

From time to time, we may be party to various lawsuits, claims for negligence and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings which, individually or in the aggregate, would be expected to have a material effect on our business, financial position, liquidity or results of operations if determined adversely to us.

Insurance

Our tenants are generally required to maintain liability and property insurance coverage for the properties they lease from us pursuant to triple-net leases. These leases generally require our tenants to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their liability policies and additional named insured and/or loss

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payee (or mortgagee, in the case of our lenders) on their property policies. Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet. In addition, losses of a catastrophic nature, such as those caused by wind/hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable. In the event there is damage to our properties that is not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged. See “Risk Factors—Risks Related to Our Business and Properties—Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.”

In addition to being a named insured on our tenants’ liability policies, we will separately maintain commercial general liability coverage. We will also maintain full property coverage on all untenanted properties and other property coverage as may be required by our lenders, which are not required to be carried by our tenants under our leases.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an “emerging growth company” as defined in the JOBS Act, and we are eligible to take advantage of certain specified reduced disclosure and other requirements that are otherwise generally applicable to public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We have irrevocably opted-out of the extended transition period afforded to emerging growth companies in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As a result, we will comply with new or revised accounting standards on the same time frames as other public companies that are not emerging growth companies.

Regulation

General. Our properties are subject to various laws, ordinances and regulations, including those relating to fire and safety requirements, and affirmative and negative covenants and, in some instances, common area obligations. Our tenants have primary responsibility for compliance with these requirements pursuant to our leases. We believe that each of our properties has the necessary permits and approvals.

Americans With Disabilities Act. Under Title III of the ADA, and rules promulgated thereunder, in order to protect individuals with disabilities, public accommodations must remove architectural and communication barriers that are structural in nature from existing places of public accommodation to the extent “readily achievable.” In addition, under the ADA, alterations

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to a place of public accommodation or a commercial facility are to be made so that, to the maximum extent feasible, such altered portions are readily accessible to and usable by disabled individuals. The “readily achievable” standard considers, among other factors, the financial resources of the affected site and the owner, lessor or other applicable person.

Compliance with the ADA, as well as other federal, state and local laws, may require modifications to properties we currently own or may purchase or may restrict renovations of those properties. Failure to comply with these laws or regulations could result in the imposition of fines or an award of damages to private litigants, as well as the incurrence of the costs of making modifications to attain compliance, and future legislation could impose additional obligations or restrictions on our properties. Although our tenants are generally responsible for all maintenance and repairs of the property pursuant to our lease, including compliance with the ADA and other similar laws or regulations, we could be held liable as the owner of the property for a failure of one of our tenants to comply with these laws or regulations.

Environmental Matters

Federal, state and local environmental laws and regulations regulate, and impose liability for, releases of hazardous or toxic substances into the environment. Under various of these laws and regulations, a current or previous owner, operator or tenant of real estate may be required to investigate and clean up hazardous or toxic substances, hazardous wastes or petroleum product releases or threats of releases at the property, and may be held liable to a government entity or to third parties for property damage and for investigation, clean-up and monitoring costs incurred by those parties in connection with the actual or threatened contamination. These laws may impose clean-up responsibility and liability without regard to fault, or whether the owner, operator or tenant knew of or caused the presence of the contamination. The liability under these laws may be joint and several for the full amount of the investigation, clean-up and monitoring costs incurred or to be incurred or actions to be undertaken, although a party held jointly and severally liable may seek to obtain contributions from other identified, solvent, responsible parties of their fair share toward these costs. These costs may be substantial and can exceed the value of the property. In addition, some environmental laws may create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. As the owner or operator of real estate, we also may be liable under common law to third parties for damages and injuries resulting from environmental contamination emanating from the real estate. The presence of contamination, or the failure to properly remediate contamination, on a property may adversely affect the ability of the owner, operator or tenant to sell or rent that property or to borrow using the property as collateral and may adversely impact our investment in that property.

Some of our properties contain, have contained or are adjacent to or near other properties that have contained or currently contain storage tanks for the storage of petroleum products or other hazardous or toxic substances. Similarly, some of our properties were used in the past for commercial or industrial purposes, or are currently used for commercial purposes, that involve or involved the use of petroleum products or other hazardous or toxic substances or are adjacent to or near properties that have been or are used for similar commercial or industrial purposes. These operations create a potential for the release of petroleum products or other hazardous or toxic substances, and we could potentially be required to pay to clean up any contamination. In addition, environmental laws regulate a variety of activities that can occur on a property, including the storage of petroleum products or other hazardous or toxic substances, air emissions, water discharges and exposure to lead-based paint. Such laws may impose fines or penalties for violations and may require permits or other governmental approvals to be obtained for the operation of a business involving such activities. As a result of the foregoing, we could be materially and adversely affected.

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Environmental laws also govern the presence, maintenance and removal of asbestos-containing materials (“ACM”). Federal regulations require building owners and those exercising control over a building’s management to identify and warn, through signs and labels, of potential hazards posed by workplace exposure to installed ACM in their building. The regulations also have employee training, record keeping and due diligence requirements pertaining to ACM. Significant fines can be assessed for violation of these regulations. As a result of these regulations, building owners and those exercising control over a building’s management may be subject to an increased risk of personal injury lawsuits by workers and others exposed to ACM. The regulations may affect the value of a building containing ACM in which we have invested. Federal, state and local laws and regulations also govern the removal, encapsulation, disturbance, handling and/or disposal of ACM when those materials are in poor condition or in the event of construction, remodeling, renovation or demolition of a building. These laws may impose liability for improper handling or a release into the environment of ACM and may provide for fines to, and for third parties to seek recovery from, owners or operators of real properties for personal injury or improper work exposure associated with ACM.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs.

With respect to each of the properties in our initial portfolio, CTO has obtained Phase I environmental site assessments. We will obtain Phase I environmental assessments on all properties we acquire after the completion of this offering. Phase I environmental site assessments are limited in scope and therefore may not reveal all environmental conditions affecting a property. However, if recommended in the initial assessments, we may undertake additional assessments such as soil and/or groundwater samplings or other limited subsurface investigations and ACM or mold surveys to test for substances of concern. A prior owner or operator of a property or historic operations at our properties may have created a material environmental condition that is not known to us or the independent consultants preparing the site assessments. Material environmental conditions may have arisen after the review was completed or may arise in the future, and future laws, ordinances or regulations may impose material additional environmental liability. If environmental concerns are not satisfactorily resolved in any initial or additional assessments, we may obtain environmental insurance policies to insure against potential environmental risk or loss depending on the type of property, the availability and cost of the insurance and various other factors we deem relevant. Our ultimate liability for environmental conditions may exceed the policy limits on any environmental insurance policies we obtain, if any.

Generally, our leases require the lessee to comply with environmental law and provide that the lessee will indemnify us for any loss or expense we incur as a result of the lessee’s violation of environmental law or the presence, use or release of hazardous materials on our property attributable to the lessee. If our lessees do not comply with environmental law, or we are unable to enforce the indemnification obligations of our lessees, our results of operations would be adversely affected.

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We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist on our properties in the future. Compliance with existing and new laws and regulations may require us or our tenants to spend funds to remedy environmental problems. If we or our tenants were to become subject to significant environmental liabilities, we could be materially and adversely affected.

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MANAGEMENT

Our Executive Officers, Directors and Director Nominees

Upon the completion of this offering, the concurrent CTO private placement and the formation transactions, our board of directors will consist of five directors, including the four independent director nominees named below who will become directors upon completion of this offering. Each of our directors is elected by our stockholders to serve until the next annual meeting of our stockholders and until his or her successor is duly elected and qualifies. Of the five directors, we expect that our board of directors will determine that each of them other than Mr. Albright will be considered independent in accordance with the requirements of the NYSE. The first annual meeting of our stockholders after this offering will be held in 2020. Our charter and bylaws provide that a majority of the entire board of directors may at any time increase or decrease the number of directors. However, unless our charter and bylaws are amended, the number of directors may never be less than the minimum number required by the MGCL nor more than 15. Executive officers serve at the pleasure of our board of directors.

The following table sets forth certain information concerning the individuals who will be our directors and executive officers upon the completion of this offering:


Name		Age