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Date

Thursday, May 7, 2026 at 11 a.m. ET

Call participants

  • Chief Executive Officer — Stephen Preston
  • President, Chief Financial Officer, and Treasurer — Pierre Revol
  • Operator

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Takeaways

  • Top tenant concentration -- Largest tenant accounts for 3.1% of ABR; top 10 tenants combined make up 23% of ABR.
  • Restaurant exposure -- Portfolio restaurant exposure reduced from 37% at IPO to under 23% of ABR.
  • Recent acquisitions -- Acquired 10 properties for $34 million at a 7.5% average cash cap rate and a 9.4-year weighted average lease term; median purchase price was $2.3 million, median rent per box $170,000.
  • Baton Rouge Jiffy Lube acquisition -- Purchased at a 7.4% cap rate on a 10-year net lease, $160,000 annual rent, and strategic location with frontage benefits.
  • Dispositions -- Sold five properties totaling $10 million at a 6.9% average cash cap rate (occupied assets), with an eight-year weighted average lease term; included assets such as Dollar Tree in Vermillion and McAlister’s Deli.
  • Occupancy rate -- Ended quarter at approximately 99% occupancy, with four vacant assets and three actively being re-tenanted.
  • Re-tenanting performance -- Three re-tenanted properties produced a 23% aggregate rent increase over previous leases; historical re-tenanting rent spreads have exceeded 110% of prior rent.
  • Adjusted cash revenue -- Increased sequentially by $707,000 to $16.3 million, including $274,000 lease termination fee and $75 million in acquisitions completed over two quarters.
  • Other operating income detail -- Newly broken out disclosure includes termination fees, late fees, and miscellaneous active management income, in response to industry transparency standards.
  • Non-reimbursable property costs -- Decreased sequentially by $385,000 to $263,000, representing 1.6% of adjusted cash revenue (down from 4.2% previous quarter).
  • First quarter cash NOI -- Supported by termination income, re-tenanting, and lower property leakage; run-rate for the following quarter expected to normalize at $15.7 million (about $700,000 lower than Q1 actuals).
  • Adjusted cash G&A -- Held steady at $2.4 million, unchanged from the prior quarter.
  • Leverage and liquidity -- Revolver balance at $114 million; net debt to annualized adjusted EBITDAre at 5.3x; LTV at 32.6%; fixed charge coverage ratio at 3.5x; capacity for an additional $50 million of preferred equity available, which would reduce net debt to annualized adjusted EBITDAre to 4.4x.
  • Dividend -- Quarterly dividend declared at $0.215 per share, representing a 63.2% AFFO payout ratio, the lowest since IPO.
  • AFFO per share guidance -- Increased to a range of $1.29 to $1.33, driven by first quarter performance, portfolio strength, and operating results; midpoint indicates 5% growth, and high end 7% year-over-year growth.
  • Net investment target -- Maintaining $100 million fully funded investment goal for the year.
  • Asset recycling strategy -- Ongoing focus on pruning non-core assets, targeting $40 million-$50 million in dispositions this year, approximately half of previous year’s pace.
  • Pipeline and market position -- Acquisition pipeline fully built for Q2 and Q3; focus continues on top 100 MSAs, motivated sellers, and attractive tenant mix with new names such as Hawaiian Bros, Burlington, Bob’s Furniture, and Giant Eagle.
  • Development opportunities -- Management expects to initiate a limited, low-risk development program with anticipated spreads of 100 to 200 basis points over stabilized assets, $1 million-$3 million of equity per transaction; previous internal developments have generated $10 million of value, about a 90% uplift above purchase price.
  • Portfolio diversification -- 77% of properties located in top 100 MSAs, average five-mile population of 175,000, with reductions underway in Illinois concentration and continued increases in Texas allocation.
  • Bad debt and watch list -- No material changes to credit watch list; portfolio bad debt expected around 50 basis points, with minimal known risk exposures called out.
  • Rent roll-ups & renewals -- Historical lease renewal rate stands at 90%, with average rental rate recapture of 106%; most renewals and expirations are positioned in top quartile Placer scoring assets.

Summary

FrontView REIT (FVR +4.57%) delivered sequential and year-over-year improvement in core portfolio metrics, driven by disciplined acquisition, active asset management, and strong capital allocation. Quarterly results reflected both higher adjusted cash revenue and a reduced cost structure, supporting the increase in AFFO per share guidance and a record-low payout ratio since going public. The management team emphasized continued execution on diversification, occupancy maximization, and selective development as engines for long-term, risk-adjusted growth.

  • Management raised guidance for AFFO per share, stating the increase was "primarily driven by our strong first-quarter operating results and continued portfolio performance to date."
  • The call highlighted "best-in-class disclosures" with enhanced transparency, such as breaking out other operating income categories and providing detailed tenant and property metrics on the company website.
  • Strategic use of preferred equity and moderate leverage was outlined as a primary means to execute on the $100 million net investment target while maintaining a conservative capital structure.
  • Proactive portfolio management—including redevelopment and re-tenanting efforts—continues to drive above-market rent growth, while the company positions itself to gradually enter small-scale, yield-accretive development projects as the investment environment shifts.
  • The company noted its portfolio quality and disciplined sourcing enable the consistent achievement of wide acquisition/disposition spreads, stating disposals are focused on assets "Those are the assets that we have sold off that are not our best assets—certainly not our Chipotles, not our Raising Cane’s, not our Walmart, not our Lowe’s. These are assets that we sold off to optimize the portfolio." and that historical spreads around 60 basis points are expected to be "very repeatable."

Industry glossary

  • ABR (Annualized Base Rent): The total annualized contractual rent paid by tenants, used to measure income concentration and portfolio diversification risk.
  • Placer.ai score: A location analytics metric referenced to benchmark retail asset quality and strength of foot traffic, with higher scores indicating superior performance within the state and category.
  • Cap rate: The ratio of net operating income to acquisition price or fair value, typically used to assess investment yield in real estate acquisitions and dispositions.
  • Net lease: A real estate lease structure where the tenant pays most or all operating expenses, including taxes, insurance, and maintenance, in addition to base rent.
  • NOI (Net Operating Income): Income from property operations before debt service and capital expenditures, key for evaluating asset-level profitability.
  • MSA (Metropolitan Statistical Area): A geographic region with a dense population nucleus and economic ties, often used for investment targeting or diversification benchmarks in real estate portfolios.

Full Conference Call Transcript

Stephen Preston: Thank you, Pierre, and good morning, everyone. This quarter demonstrates the operational and portfolio advancements we have made over the last year. We have elevated the strength of the management team, enhanced our portfolio, deepened tenant and industry diversification, and continued to focus on attractive markets with replaceable rents and high profile street frontage locations. Since the IPO, we have reduced our largest tenant exposure to 3.1%, lowered our top 10 tenant concentration to 23%, and reduced our restaurant exposure from 37% to under 23%. At the same time, we have invested in technology, data, and processes that improve scalability and decision making. FrontView REIT, Inc. is in its strongest position since inception and is poised to deliver compounding growth.

Our scalable real estate-first strategy is focused on acquiring fungible, frontage-based assets typically located in dense retail corridors where underlying land value provides downside protection. Today, 77% of our properties are located within a top 100 MSA, and our average five-mile population is 175,000 people, highlighting the vibrant, desirable markets in which we own and operate real estate. Consistent with this strategy, we disclose each of our property locations through Google Maps links on the portfolio page of our corporate website. We also disclose every tenant and its ABR in our filings. I encourage investors to review these best-in-class disclosures which provide detailed, industry-leading visibility into the merits of our real estate, tenant credit, box sizes, and portfolio diversification.

As I mentioned last quarter, we will be featuring an acquisition each quarter on the front cover of our investor presentation. This quarter, we are highlighting a Jiffy Lube in Baton Rouge, Louisiana, the second-largest MSA in the state and a top 100 MSA nationally. Jiffy Lube is a national automotive service brand and subsidiary of Shell USA, with more than 2,000 locations across North America. We acquired the property at a 7.4% cap rate on a 10-year net lease. The site sits directly in front of a Walmart Neighborhood Market and across from Raising Cane’s, with direct frontage on Kersey Boulevard and approximately 37,000 vehicles per day.

At roughly $160,000 of annual rent, the rent basis is replaceable with arguable upside given the visibility, traffic counts, and surrounding retail demand. We were able to acquire the asset at an attractive price and at a significant discount to market by accommodating a seller-specific time and requirement. This acquisition demonstrates FrontView REIT, Inc.’s reputation as a buyer that can solve problems for sellers and source transactions that are not widely marketed. To summarize, we bought a fungible asset with frontage, with replaceable rent, in a desirable retail node, all at an elevated cap rate relative to the market. Including this asset, we own three Jiffy Lubes representing about 60 basis points of our ABR.

In addition to this Jiffy Lube, I would also call your attention to the cover of our annual report where we highlight another one of our properties: a two-tenant building leased to Wells Fargo and T-Mobile. This is an A+ location across from a Walmart Supercenter in urban Dallas. The property is under-rented at $313,000 annual rent, with over 6,000 square feet of rentable area and is situated on approximately one acre of land on a corner with over 295,000 vehicles per day. This is emblematic of the type of real estate we are focused on securing.

For the quarter, we acquired 10 properties for $34 million at an average cash cap rate of 7.5% and a weighted average lease term of 9.4 years. These acquisitions were consistent with the characteristics we target across the portfolio, including a median purchase price of $2.3 million, a weighted average Placer.ai score of 26 indicating top 30% of the category within the state, and a median rent per box of $170,000. With respect to acquisition cap rates, we anticipate Q2 2026 to settle around 7.3% to 7.4% with volumes generally in line with our guidance. We continue to see significant depth in the marketplace, particularly in smaller transactions where FrontView REIT, Inc. has real advantages.

Since we are not dependent on larger transactions or portfolio deals, we rarely compete directly with large institutional buyers, REITs, or private equity capital. This allows us to secure attractive transactions from multiple sources where our execution and reputation provide us with a competitive edge relative to other, less sophisticated parties in the space. We are also seeing select development opportunities where our extensive retail development experience may allow us to achieve meaningfully wider yields while maintaining a disciplined approach to risk. Our team’s decade of historical experience developing outparcels along with developing retail and large-format shopping centers makes us uniquely qualified to underwrite and evaluate development opportunities. This capability is already established at FrontView REIT, Inc.

We have completed several successful, value-creating developments including a Miller’s Ale House to a Raising Cane’s, a Sleep Number to a Seven Brew, a Burger King to a Chipotle, a Twin Peaks to a Jaggers and a Panda Express, and a new Bank of America ground lease in front of our Walmart in Rochester. Collectively, these projects created about $10 million of incremental value, representing an approximately 90% increase in value to our shareholders over and above our original purchase price. Although we do not currently have any third-party development assets under formal contract, we expect to begin a limited development program over the next few quarters and look forward to generating outsized risk-adjusted returns on these assets.

Regarding dispositions, we sold five properties for $10 million during the quarter at an average cash cap rate of approximately 6.9% for the occupied assets, with a weighted average lease term of eight years. We sold a Dollar Tree in Vermillion, South Dakota which did not align with our real estate-first focus, and an underperforming McAlister’s Deli. Asset recycling is part of our strategy, and we expect dispositions to be incrementally focused on fine-tuning the portfolio and pruning less optimal locations and concepts. Switching to the portfolio, we ended the quarter at approximately 99% occupancy, with only four vacant assets. Importantly, our view of vacancy is shaped by the quality of the underlying real estate.

Historically, when we have re-tenanted properties, we achieved rent spreads north of 110% of prior rent, which reinforces our willingness to be patient and pursue the right long-term outcome rather than defaulting to a quick sale. During the quarter, we successfully re-tenanted three expiring locations: a CVS in Chicago, a Dollar Tree in Newark, and a Twin Peaks in North Carolina. As highlighted on page 3 of our investor presentation, these transactions in total generated over 23% increases in rent relative to the prior tenants, reinforcing the embedded value of our real estate and the strength of our locations. These properties create a temporary drag in 2026 because repositioning takes time. However, the right answer is to be patient.

By focusing on quality locations, fungible boxes, and replaceable rents, we can generate stronger outcomes. These re-tenantings create meaningfully greater long-term value than simply selling the asset quickly and redeploying the proceeds. Over time, this approach enhances organic growth as our high-quality real estate appreciates. With multiple proven levers to create value, including active asset management, re-tenanting, and accretive acquisitions, we are well positioned to generate returns both through growth and expertise, not simply relying on outside capital or market conditions. We are aligned with our shareholders and we will continue to capitalize on value-enhancing opportunities, positioning us to outperform. With that, I will turn the call over to Pierre Revol to review the quarterly numbers and guidance.

Pierre Revol: Thanks, Stephen. We had a strong operational quarter driven primarily by improved cash NOI and accretive capital deployment. Our adjusted cash revenue, which excludes reimbursement income and non-cash items, increased $707,000 sequentially to $16.3 million. The increase was driven by $75 million of acquisitions completed over the two quarters, as well as a $274,000 lease termination fee related to a dark Take 5 property. We subsequently sold the vacant asset for $1.7 million, generating close to a $700,000 gain over our original purchase price, highlighting the strength of our basis and underlying real estate.

During the quarter, we enhanced our revenue disclosure by separately presenting other operating income, which includes termination fees, late fees, and other miscellaneous income generated through active portfolio management. These amounts are a normal part of operating a diversified real estate portfolio, but they are more episodic than base rent or percentage rent. Although this level of detail is not commonly broken out by net lease REITs, we believe the additional transparency helps investors better understand the underlying drivers of our results. This change is consistent with our broader commitment to best-in-class disclosures, is reflected in our Form 10-Q, and is highlighted in both our supplemental and investor presentation.

Our non-reimbursable property costs decreased $385,000 sequentially to $263,000 or 1.6% of adjusted cash revenue, compared to 4.2% last quarter. This meaningful improvement was driven by improved occupancy, higher recovery income, and the impact of portfolio optimization work completed in 2025. As Stephen mentioned, we also have three properties currently being re-tenanted that contributed $181,000 of base rent in the first quarter. These three properties have already been leased to four tenants, with the majority of the rent commencement staggered over the next 12 to 18 months. Once stabilized, we expect orderly rent from these assets to increase to approximately $225,000.

First-quarter cash NOI benefited from termination income, rent from the three properties currently being re-tenanted, and unusually low property cost leakage relative to the 2%–3% range we anticipate for 2026. After normalizing for these items, second-quarter run-rate cash NOI on the current portfolio would approximate $15.7 million before the incremental benefit from the recently executed re-tenanting leases, or approximately $700,000 lower than Q1 actuals. Our adjusted cash G&A was $2.4 million, consistent with the prior quarter. As we continue to grow our asset base, we have meaningful opportunity to create operating leverage by building the business the right way, through disciplined processes, better data and technology, and a platform that can scale with limited incremental G&A.

Beginning last fall, we began investing in select technology partnerships, enterprise licenses, data analytics, and workflow applications to improve the efficiencies and operations of our business. These investments are building blocks in our effort to create an AI-native net lease REIT. Importantly, these tools and process changes are not a substitute for real estate judgment. They complement the deep real estate experience built over decades as private developers—what we often refer to as our developer DNA. Our objective is to build scalability, improve decision making, enhance risk management, and drive efficiency with an emphasis on data analytics. Turning to the balance sheet.

Our revolver balance decreased modestly to $114 million, and our cash interest expense declined $86,000 sequentially to $3.8 million. Net debt to annualized adjusted EBITDAre improved by three-tenths of a turn to 5.3x, while LTV fell to 32.6%, and our fixed charge coverage ratio remained strong at 3.5x. Including the remaining $50 million of available convertible preferred equity capacity, adjusted net debt to annualized adjusted EBITDAre was 4.4x. We also announced a quarterly dividend of $0.215 per share, which represents a 63.2% AFFO payout ratio. This is our lowest payout ratio since becoming a public company. It provides more free cash flow to fund higher growth. Turning to guidance.

We are maintaining our fully funded net investment target of $100 million and raising our AFFO per share guidance range to $1.29 to $1.33. At the midpoint, this represents 5% year-over-year growth, and at the high end approximately 7% growth. The increase in AFFO per share guidance is primarily driven by our strong first-quarter operating results and continued portfolio performance to date. We remain disciplined in capital allocation; our fully funded investment target provides meaningful visibility into our ability to grow while maintaining a conservatively levered balance sheet and dividend policy. As we said before, our smaller size is a structural advantage.

With only $100 million of net investment, we can generate elevated AFFO per share growth while remaining disciplined in our capital allocation criteria. Our cash flow per share growth is built on a frontage-focused portfolio that is intentionally diversified across tenants and industries, yet concentrated in the attributes that matter most as real estate investors: targeting top 100 MSAs, fungible boxes, and replaceable rents. When combined with our discount to NAV, our growth profile is not yet reflected in our forward FFO per share. To help frame that disconnect, we included pages 24 and 25 in our investor presentation, which compare FrontView REIT, Inc.’s growth, diversification, and valuation relative to peers.

FrontView REIT, Inc.’s growth profile is already among the most competitive in the net lease sector, while our AFFO multiple relative to growth remains among the lowest. In our view, that gap does not reflect the quality of the real estate we own, the multiple avenues that drive FrontView REIT, Inc.’s growth, or the long-term value creation embedded in the portfolio. With that, I will turn the call over to the Operator to open it up for Q&A. Operator?

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Anthony Paolone with JPMorgan Chase. Please go ahead.

Anthony Paolone: Oh, great. Thanks. Good morning, everybody. My first question is, you brought up the idea of looking at development deals. Could you maybe expand on that a little bit and give us a sense as to what order of magnitude you are looking at right now, who your partners might be, how you might structure these sorts of things? Just a little bit more detail would be great.

Stephen Preston: Yeah, sure. Good morning, Anthony, and thank you. Good question. I will start with, as a management team, we have been historically involved in significant retail development activities. We are going to look to develop when risk is mitigated, and certainly that will mean that we have a signed lease, that we have entitlements in place—that means your site plan is in place. We have costs in place through a general contracting contract. We have, of course, zoning, and then we are going to have building permits in tow as well. We are going to start small. We think that it is going to be small capital allocations—maybe $1 million to $3 million of equity for any one transaction.

Ultimately it is very important that we make sure we have sufficient spreads—that is certainly why you are doing development in the first place—built into the project. And so we expect that we will be doing our own development and that we will be developing with sophisticated partners as well, and expecting somewhere between 100 to 200 basis points of spread built into the projects. I think it is also important to note that development is certainly not new to FrontView REIT, Inc. as well. We have already completed several developments in our portfolio. We have completed a Miller’s Ale House to a Raising Cane’s, a Burger King to a Chipotle, we did a Sleep Number to a Seven Brew.

Of course, the Twin Peaks that we have been talking about to two separately box-suited tenants, Jaggers and a Panda Express. And then ultimately we created a Bank of America in our Walmart Rochester outparcel from scratch under vacant land. So we are very suitable and ready to embark upon a development program. And these activities too, I think it is important to note, have brought about $10 million of value increase over and above our purchase price across those assets. So this can be a good engine for us and very accretive, and again we are going to take it slow in the beginning.

Pierre Revol: I would just add to that, Anthony. The legacy of the company as a developer goes back even in the NADG days. They were partners with Kimco in a lot of projects as well. There is a lot of understanding on how these partnerships work. And then both Stephen and the team here have these relationships with these developers and have done it for a very long time. That is why it makes sense if you find the right partnership and the right deal with the right real estate qualities that we are pursuing.

Anthony Paolone: Okay. Thank you for all that color there. And then just my second question is on the leasing side. You seem to be off to a good start there. Can you maybe give us a little bit of a look ahead and anything you are picking up in terms of potential known move-outs, or how things are going as you look out into 2027?

Stephen Preston: Yeah. I mean, I think that is maybe kind of a credit watch list or call it a bad debt question. Everything feels pretty good right now as we look forward. We have the watch list. I think it is pretty minimal. Again, coming from last quarter as well, we have no material changes or additions to that watch list. It seems very healthy. We are watching a GoHealth, a Sleep Number, a couple of small urgent cares, and a couple of gas stations. But otherwise it feels pretty good. We have worked through the pharmacy throughout the portfolio, and that exposure is roughly about 2% or less.

And then our total Sleep Number exposure is roughly 70 basis points across all three. To extrapolate a little bit on that, we expect bad debt to be in that 50 basis points range. Right now very little is known, so mostly it is about the unknown at this point.

Pierre Revol: And then in terms of lease expirations, we have 10 expirations coming up. There is nothing really in there that we expect to be problematic. We have a couple of vacancies. We have four properties. We are working through those. I think that we talked about Smokey Bones last quarter. We are working to sign a lease on that one. And we have a Walgreens as well that we are working to sign a lease. Those would be potential pickups as we look forward. But we feel very comfortable around the expiration schedule.

Stephen Preston: Yeah, actually, that will be a good one. The Smokey Bones is an asset that we decided to take our time on, and that is looking like it is going to become two tenants as well. So again, the virtues of the real estate we buy and the demand that tenants have for this real estate. And then that one other Walgreens that closed—we have hopefully a good tenant that is going to backfill that; we are very close to finalizing that. Everyone will be very happy to hear and learn about it. So again, very excited about our ability to continue to re-tenant and create very strong recapture rates relative to where we were prior.

Anthony Paolone: Great. Thank you.

Operator: Next question comes from Eric Borden with BMO Capital Markets. Please go ahead.

Eric Borden: Good morning. Thanks for taking my question. Just following up on the recapture rates and the lease expiration schedule, just curious if you could help quantify the mark-to-market or recapture rate that you are hoping to achieve on the 10 lease expirations this year and then the 33 in the following year. Thank you.

Stephen Preston: Yeah, sure. Of course. Just to expound upon the expirations, I will start with the theme: it is accurate. We have quality real estate. It is desirable. It is fungible, and our portfolio is exceptionally diversified. We view these lease expirations as opportunities for us, and we are not looking to quickly sell these off before expiration. For some context, Eric, since 2016, we have had 51 tenants renew—45 have renewed to the same tenant and six renewing to a new tenant—and we are about at 106% rental rate recapture. Our overall renewal rate is about 90%.

So the comment about 2026 and coming up on 2027: the tenants that are renewing or are about to expire are in the top quartile in Placer, so they are performing well. In 2026, we are already through half of the expirations, and we have increased rent income. We only have about nine left, so we expect 2026 to, again, just like historicals, be a very positive year. And then we expect 2027 to follow that same suit, and we are already in discussions with a number of those tenants. Again, very real estate-focused and tenant-driven based on that quality of real estate.

Pierre Revol: And I would also add, Eric, to point you to page 12 of our investor presentation. There are several stats here around the Placer scores and the populations, but the one I would call out is a median rent per box over the next five years of all the expirations of $156,000. So if you go to our website, you look at our boxes, you sort of know what is there. That is very good basis. So most people will renew as expected, but on the off chance of the 10% that may not renew or choose not to renew, maybe in 2027, we will be able to resolve that and get higher rents.

Eric Borden: Thank you. Appreciate all the detail. My follow-up question is on the disposition spread over acquisitions that you achieved in the quarter—it was approximately 60 basis points. Just curious, how repeatable is that spread as you look to complete your net investment goals this year? Thank you.

Stephen Preston: I would say very repeatable, and we will just use historical data to hit that home. So far, in 2025 and into 2026, we have sold off about $86 million of property at about a 6.97% cap rate on average. That is obviously considerably below where we are trading at—close to an 8% or in the upper 7s. Those are the assets that we have sold off that are not our best assets—certainly not our Chipotles, not our Raising Cane’s, not our Walmart, not our Lowe’s. These are assets that we sold off to optimize the portfolio.

To give everyone a little bit of flavor on the types of assets that were sold off: Twin Peaks that filed for bankruptcy; Red Lobster; we sold off Ruby Tuesday’s that was previously in bankruptcy; Cafe Rio, which has been closing some stores; we sold a dark Bojangles; and a Denny’s franchisee. If you go through that list—again, these are not the best assets that we have in the portfolio, and they were sold off to optimize. We certainly expect to continue with cap rates in that realm. If we were to add in a couple of the hot assets, then you would see that drop materially.

Operator: Your next question comes from Ronald Kamdem with Morgan Stanley. Please go ahead.

Ronald Kamdem: Great. Maybe just staying on capital recycling—could you talk a little bit more about the acquisition pipeline and cap rates, how those have been trending, and then on the disposition side, clearly there is always pruning to be done, but are you mostly through, or how should we think about what is left to be filled? Thanks.

Stephen Preston: Yeah, let me just start with dispositions. I think the optimization is fairly close to complete. I think it is always prudent to be managing the portfolio, so we expect that we are going to continue to have dispositions, and we probably expect somewhere in the $40 million to $50 million range this year in the aggregate, down about half from prior. With respect to cap rates, we were about 7.5% for the quarter. The market is pretty stable. We expect—we are sort of forecasting—cap rates in Q2 somewhere in that 7.3% range, maybe similar in Q3. In the market, there is increased institutional interest just generally in net lease.

There is an abundant amount of capital that is really setting the tone for the market. We play in a different market. Leverage for the smaller buyers is a little bit easier to obtain from some of the smaller banks. Cap rates in the shopping center retail area have come in pretty significantly, not quite the same for our space. We still feel very good with that stable market. I think also the 7.3% versus some of the historical cap rates we have seen— we are going to be focusing a little bit more on what we call “good hot states.” We have got Texas where there is increased population growth, Florida, Georgia, Arizona, etc.

Cap rates can be a little bit tighter there. They are generally more landlord-friendly states. To hit on your pipeline question, we have a very strong, deep pipeline. At this point, Q2 is expected and in tow. We have Q3 right now effectively set and in tow. We are seeing a lot of great opportunities. We are buying the same stuff that you see in our portfolio: great real estate with frontage, low rents, typically from motivated or circumstantial sellers. Credit is solid. These are large operations that are long-term operating businesses. Our market, Ron, is attractive, and it is open to us.

Just to give a couple of tenants that are in our pipeline: Hawaiian Bros would be a new tenant; Burlington—new tenant; Bob’s Furniture—new tenant; Tropical Smoothie; Spec’s—new tenant; we are looking at a PNC; a pair of veterinarian clinics—new tenants; a Giant Eagle grocery store—new tenant. So we are expanding and buying these great tenants in great markets with great real estate and great credit. The market is there for us, and we certainly have the ability, if we wanted to, to increase the acquisition cadence. We established that availability when we first went public with about $100 million in a quarter.

Right now we have the $100 million with our capital in tow, and we are set for this year. But we could certainly expand that, Ron, if we needed to.

Ronald Kamdem: Great. Really helpful. And then for my follow-up—on the guidance raise, could you just go through the pieces? Is it bad debt? Is it higher rents? Just quickly the guidance raise components. Thanks.

Pierre Revol: The guidance range is primarily driven by the portfolio doing really well. If you think about what we printed in the first quarter at $0.34, at the midpoint of the range, you are effectively doing $0.32–$0.33 in the remaining three quarters. We are not seeing any issues in terms of the portfolio leasing. We do not have any dispositions that are required—these are just portfolio optimizations, nothing distressed. We are seeing good things in the portfolio. We feel comfortable with the range. With most of our bad debt just being unidentified reserves on the things that we are watching, we thought it was a good time to continue to move it forward.

Ronald Kamdem: Helpful. Thank you.

Operator: Your next question is from Yana Golan with Bank of America. Please go ahead.

Yana Golan: Hello? Just following up on the guidance range. Like you said, it kind of implies $0.32–$0.33 per quarter AFFO. So I guess sequentially, how should we think about the cadence for the balance of the year? And then what factors are expected to drive the implied moderation?

Pierre Revol: Sure. In my prepared remarks, I walked you through the NOI components in terms of what was in place in the first quarter that will drop a bit into the second quarter. The other income that we called out, and those three tenants that expired and are being re-tenanted—those re-tenantings will not really impact 2026, but will flow into 2027. All in, that drops the effective NOI from Q1 going to Q2 by $700,000.

So when you think about the cadence in terms of AFFO per share, you would expect that sort of drop into Q2 from the $0.34, but then as we have these assets coming in and being deployed, and the rent escalators, AFFO should increase from there to get within that roughly $1.31 midpoint.

Stephen Preston: Midpoint.

Yana Golan: Thank you.

Yana Golan: And just sticking to cadence, given where the current share price is and the maintenance of the net investment guidance, how should we be thinking about the timing of deployment of the remaining $50 million of the preferred capital?

Pierre Revol: It might be helpful to just go over that. The preferred equity capital we put in place last year on November 12 was $75 million at 6.75% with a convertible feature at $17 a share, which we are over. We have until November 12 to call it, and our idea was to hit our target of $100 million of acquisitions and fund it with the $75 million of equity capital this year. For two years after that final draw—so as late as November 2028—we cannot convert it.

There might be a question of whether or not they would convert it, which is possible, but I would doubt that they would, considering that the yield they are getting is 6.75% versus our dividend yield which is much lower than that. But we are fully funded. I expect that we will match fund our acquisitions with the equity and some debt on a 25% LTV ratio as I talked about before. Our second quarter and our third quarter, as Stephen mentioned, are pretty well built, and we will just time the deployment of that preferred equity to fund those deals. Thank you.

Operator: Your next question comes from John with B. Riley Securities. Please go ahead.

John: Good morning. Maybe thinking about investment yields—I know you talked a little bit about where you want to see development spreads; I am assuming relative to your cost of capital—but how could that impact or maybe uplift the historical cap rates you have seen on your more traditional investments?

Stephen Preston: When we are investing in developments, we are going to be expecting to receive a preferred return at the beginning on the capital. What we will be able to do on the development side with the spreads is end up acquiring assets that we would not otherwise be able to acquire due to that spread. For example, if we were wanting to acquire a Chick-fil-A today at a 5% cap rate—as much as we would like to have a few Chick-fil-As in the portfolio—that does not necessarily make sense.

But from a development standpoint, it is going to give us access to tenants that we could not otherwise be able to acquire because you add your spread of roughly 150 to 200 basis points, and then now you are putting a Chick-fil-A on the books in the high 6s or low 7s. That is a really good, accretive way to create value for the portfolio. The stable cash flow would be there; we could then turn around and sell that in the open market and create that widened spread.

John: That makes sense. And then as I am thinking about the rent roll-ups on the leasing activity, how much of that was tied to replacing tenants that had credit issues? I am assuming the Twin Peaks was kind of repositioning within that number. And was any of it just purely lease expirations where you felt you needed a better rent with a new tenant and therefore did not keep the old tenant in place?

Stephen Preston: I think it is a little bit of both. It is credit, it is lease expirations, and it is also being proactive and getting ahead of where we think we may have something that could be a problem. Like our Miller’s Ale House to Raising Cane’s, for example—that was a paying, operating tenant. We understood that sales volumes were not performing well. We proactively reached out and worked through a buyout, and then replaced that tenant with a Raising Cane’s ground lease, which was a huge uplift. So throughout the portfolio, it is a combination of everything, driven by strong underlying real estate value and rents that are low throughout the portfolio.

Pierre Revol: I would just highlight on the three we talked about. The Twin Peaks was actually expiring in the first quarter, so we knew that was an expiring lease. We knew that they were doing so-so, so we solved it before it expired, which is where we can add value. We knew it was coming, we monitored it, and we got a 92% rent increase. The other one is CVS. We knew that the CVS in Chicago was not certain to stay open or renew. They decided not to renew, and we put in Path USA, a child care, which will get an 18% rent increase once that tenant goes in.

It is about knowing what is coming and whether or not they are going to stay open or close. If you do not think they are going to renew, get ahead of it and figure out who is the best tenant to replace it. Broadly in net lease, a lot of times people talk about recapture and growth, but they miss the people that do not renew. For us, the ones that do not renew, we are actually finding opportunities to grow there, which ultimately leads to less earnings going away because you have leases that will come on later.

It goes to the fact that we have good real estate and good locations where you can find new tenants to replace these boxes, which will help us in 2027 and beyond.

Stephen Preston: It is a lot of proactive portfolio management. It is our decades of experience in the real estate space. It is our constant discussions with tenants that allow us to get ahead of these renewals and probabilities. And it is the relationships that we have with real estate directors and tenant rep brokers so we can get a very good understanding of how a tenant is performing, and then we make the appropriate decisions as well.

John: Appreciate that color. Thank you.

Operator: Next question comes from Daniel Guglielmo with Capital One Securities. Please go ahead.

Daniel Guglielmo: Hi, everyone. Thanks for taking my questions. We have talked a few times about development, but I do know over the past couple of years, really since rates went up, it has been hard to get development investments to pencil. What has changed over the past few months around the underwriting math that makes it more attractive?

Stephen Preston: You are 100% spot on. Development absolutely does depend on the market and the cycle of cap rates for acquisitions. As you can buy finished product at a higher cap rate, your development spreads begin to narrow, and conversely they widen when cap rates come in or start to fall. The timing needs to be right, and we have all seen—certainly in the retail space—cap rates come in. It is an opportunity for us to create wider returns and accretive values in the development space without taking on very much additional risk. Again, we are going to start small, and we are going to watch it as that cycle of cap rates evolves.

That is absolutely important, and it is effectively why it did not work for the last several years.

Daniel Guglielmo: Okay, great. That is very helpful. And then on the transaction market, recently what has been driving owners to sell the properties that you are acquiring? It would just be a helpful refresher because you focus on niche property types with less competition.

Pierre Revol: The market is filled with individuals and unsophisticated sellers—that is just the nature of the market that we play in—with very little institutional competition. We do not compete on big portfolios. We do not really compete on large assets or vastly marketed deals, which is an advantage for us because we are buying assets that are sub-$10 million. We do not have to deploy large sums of money. We are up against unsophisticated individuals—1031 buyers—that make decisions for a variety of reasons. It could be they just want to sell something, they need capital for something else, they are refinancing their house, they are moving to Miami, there is a death in the family.

These are a lot of the reasons why we continually see liquidity and turnover in the marketplace, and why we can, as a buyer, buy better than the other smaller groups because we do not need finance contingencies, we can close quickly, and we are sophisticated. That is why we tend to see elevated or wider spreads relative to the marketplace when we are acquiring an asset.

Daniel Guglielmo: Great. Thank you.

Operator: Your next question comes from Matthew Erdner with Jones Trading. Please go ahead.

Matthew Erdner: Hey, thanks for taking the question. You talked a little bit about the dispositions and that part being somewhat pruned out by now. As you look to refine that a little further, are there any geographic concentrations—Illinois kind of sticks out to me—or certain sectors that you are looking to move out of?

Stephen Preston: It is interesting—Illinois does get a bit of a bad rap, but some of the suburbs in Illinois are some of the strongest suburbs in the country, and they are safe and vibrant. All that being said, we have brought Illinois in, and we want to bring Texas up. We want Texas to be our number one state at some point. From an industry perspective, we are always going to continue to keep diversification—that is a prime focus—while focusing on real estate quality and our rents. We like certain medical, getting a little bit of financial, automotive—again keeping diversity. We are adding a couple of vet clinics this quarter. Fitness—we like fitness. QSR/fast casual, and certainly some retail concepts.

Fitness is generally sitting in a pretty good place right now—coming back from post-COVID levels and exceeding them. There are new concepts like yoga and HIIT moving into the LA Fitnesses of the world, and they are performing well. Where we are being careful—this is a bit of a new add for us—not that we have any high exposure to this at all: we are careful with gas as you see that model unfold, and pharmacy we have always been continuing to bring down, and that is right around 2% of ABR. Car wash we are sensitive to, even though ours perform well.

And certainly with restaurants, we have continued to reduce older, tired concepts—concepts that were popular in the 1990s and early 2000s that just are not cutting it today. We want to stay away from that. With respect to restaurants, we like what we do own. It is not that we do not like restaurants; we have reduced exposure to tired concepts. If you are getting a restaurant—a QSR with a drive-thru—that has a versatile, fungible box that can work for 10 different types of uses at low rents, we are going to continue to be happy owning those as well.

Pierre Revol: I would just add, Matt, on the disposition component: we do look at whether it is a tertiary market. We do target top 100 MSAs; we want to bring that higher. Some tenants might be really good tenants, but they are not good tenants for FrontView REIT, Inc. They are good tenants that people will buy because of their credit or national brand, but if they are in a tertiary market with a lot of land, with nothing around it, with not a lot of population, it is not really for us. You might see some of that. Those assets are still really sought after by a lot of different buyers. That could be a component.

The nice part is we can choose to do these; we do not have to do these. It is completely improving the real estate quality of the portfolio as well.

Matthew Erdner: Got it. That is very helpful. I appreciate all the comments. Thanks.

Operator: There are no further questions at this time. I will now hand the call back to Stephen for closing remarks.

Stephen Preston: Yes. Thank you, everyone, for your time today, and we appreciate your interest in FrontView REIT, Inc. and our differentiated approach to net lease. We look forward to seeing you at the BMO conference next week and, of course, NAREIT in June in New York. Please do not forget to check out our properties on our website. Be safe and be healthy. Thank you all.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.