DALLAS, February 27, 2025–(BUSINESS WIRE)–FrontView REIT, Inc. (NYSE: FVR) (the “Company”, “FrontView”, “we”, “our”, or “us”), today announced its intra quarter net investment activity for Q1 2025.
YTD NET 2025 INVESTMENT ACTIVITY
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From January 1, 2025 through the date of this release, we acquired 14 new properties for $35.3 million at a weighted average initial cash capitalization rate of 7.8% and a weighted average lease term of 12.7 years.
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The acquisitions were diversified across 7 industries, 11 tenants, and 11 states, including 5 new tenants and 2 new states. Investment grade tenants accounted for approximately 34% of the annualized base rent (“ABR”) from these acquisitions.
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As of the date of this release, we have 6 properties under contract for an additional $20.7 million at a weighted average initial cash capitalization rate of 8.2% and a weighted average lease term of 12.6 years. The properties are diversified across 5 industries, 5 tenants, and 4 states, with investment grade tenants representing approximately 12% of the ABR.
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During February 2025 we sold one property for gross sales proceeds of $2.1 million at a 6.9% cash capitalization rate, recognizing a $0.05 million gain over our original purchase price.
MANAGEMENT COMMENTARY
“We will be reporting Q4 2024 results and providing 2025 guidance after markets close on Wednesday, March 19,” said Stephen Preston, FrontView’s Chairman, Co-CEO, and Co-President. “Given we will be attending Citi’s 30th Annual Global Property CEO Conference, we will be providing a more detailed update of our operations than we customarily would at this time.”
As previously reported, we successfully demonstrated our ability to significantly increase our acquisition pace during Q4 2024 and achieve accretive spreads, all with our existing team in place. We believe we can continue to scale throughout the year without bringing on any major hires. We expect our Q1 2025 acquisition volumes to be consistent with our previous press release and, due to a very robust pipeline, we can reaccelerate cadence should the capital markets improve. Given the large and fragmented marketplace in which we operate, i.e., typically not competing against other public net lease REITs, we expect our average cap rate for Q1 2025 to be between 7.8% and 7.9%, which is approximately 30 to 40 basis points higher than our previous expectations, allowing us to continue to produce outsized, accretive growth.
At the end of 2024, we maintained a healthy portfolio occupancy of approximately 98%. We believe that our broad portfolio diversification, coupled with our ability to successfully repurpose and recycle our well-located assets with frontage, should serve to mitigate any long-term impacts to AFFO from recent or expected vacancies. Hooters (four properties), TGI Fridays (two properties), On The Border (three properties), Freddy’s (one property), World Auto (one property) and JOANN Fabrics (one property) on our previous watchlist, were either vacant as of year-end or are currently offline, though based upon signed contracts and active negotiations, we expect that a substantial majority of these properties should be back online in late 2025 at meaningful recovery rates, demonstrating the strength, quality and desirability of our frontage-based real estate. Our Team’s ability to successfully repurpose these assets will only continue to make our portfolio even stronger.
