$7.00
$15.45
bear $7.00
base $12.30
bull $15.45
margin of safety $7.00
market price* $17.15
FrontView REIT owns about 2.7 million square feet of single-tenant retail and service properties (medical and dental offices, quick-service and casual restaurants, banks, cell-phone stores, auto stores, fitness clubs, discount retail and similar) on visible roadside sites in 37 states. Tenants pay rent under long net leases and are responsible for most property costs. At the end of 2025 the portfolio was 98.7% occupied, spread across 321 tenants and 155 brands (largest brand: Dollar Tree at 3.5% of rent), with an average remaining lease term of 7.4 years. 97.3% of rent has built-in escalators averaging at least 1.7% a year. The company listed in October 2024, so its own track record is short; earlier periods are reported under a different ownership structure and cannot be put on a per-share basis, so our earnings anchor is the full year 2025. What the business earns. After deducting stock compensation, a 2025 working-capital inflow of about $8.6 million (mainly a jump in accrued liabilities, which we treated as timing and removed) and $2.3 million of leasing and building additions, 2025 owner earnings were about $29.3 million, or $1.05 per share (27.8 million shares, counting the operating-partnership units that convert into common stock). Property purchases ($125 million in 2025) are treated as discretionary growth, not a cost of standing still. Because the company carries about $330 million of bank debt, we value the business before its lenders by adding back the $14.9 million of cash interest, giving $44.2 million, or $1.59 per share, and then subtract the debt. The first half of 2026 is running about 6% above the first half of 2025 on the same measure, which supports the level but is not used to raise it. Depreciation and lease-intangible amortization are non-cash and are added back automatically; the wearing-out of buildings is instead reflected in how long we let the building portion of earnings last. Impairments on some properties ($10.5 million in 2025) and gains on property sales ($11.9 million) are non-cash or non-operating and do not enter owner earnings, but the impairments inform the leakage we allow for below. Growth credited. Actual owner-earnings growth in the last completed year cannot be measured (the 2024 comparison is a different structure); revenue rose about 12% in 2025 but that came mostly from acquisitions. The base case assumes 1.0% a year for seven years, less than the 1.7% contractual escalators, because we deduct roughly 0.7% a year for tenant failures and vacancy (2025 impairments were about 1.4% of property cost). Escalators run for seven years because that is the average remaining lease term; they are the only growth we treat as secured. We left out future acquisitions (the company has only bought under its post-listing capital structure, depends on issuing shares and borrowing to do it, and has no record through a downturn), rent growth above the escalators, and any margin improvement. What lasts after the leases. About 44% of the properties' cost is land ($329 million of $747 million), and 78% of properties are in the 100 largest metro areas, so we assume that share of rent continues indefinitely at a flat level once leases roll to market. The building share (56%) fades steadily to zero over 35 years, in line with building lives. We give no credit for inflation-driven rent growth after the leases end. The three cases.
Base case: the business is worth about $23.70 per share before debt; it owes about $11.40 per share (about $324 million of borrowings less cash, reduced slightly because the debt currently costs roughly 4.9%, below our 6% yardstick, until it matures); equity is worth about $12.30.
Bear case: the 34 leases representing 11.1% of rent expiring in 2027 (and 3.4% expiring in 2026) are not renewed on time, with a year of lost rent on those sites and about 2% permanently lower rent after re-letting; tenant failures run at about 3.2% a year against 1.7% escalators (65% of rent is from tenants below investment grade or unrated, and restaurants are 24% of rent); buildings last 30 years; and the $316 million revolver and term loan, which fall due in October 2027 subject to two 12-month extensions that require conditions to be met, are refinanced at about 7.5%. The business is worth about $19.60 per share, owes about $12.60 and equity is worth about $7.00.
Bull case: the business performs at its first-half-2026 annualized run rate of about $1.70 per share, receives the full 1.7% escalators with no leakage for seven years, and buildings last 40 years. The business is worth about $26.85 per share, owes $11.40, and equity is worth about $15.45. Debt. Both facilities (revolver $115.5 million, term loan $200 million at year-end 2025) pay a variable rate of SOFR plus 1.15%, partly hedged with swaps, and mature in October 2027, extendable to 2029. The company was in compliance with its covenants at year-end. Even the bear case earns about three times its interest bill, but a refinancing at wider spreads would absorb part of the cushion, which is why the bear case is well below the base case. What would make this wrong: tenants in the restaurant and unrated groups failing faster than assumed; refinancing that is unavailable rather than merely more expensive; or the 2026-2027 lease expirations renewing at well below current rents. Conversely, the value would be higher if the company grows accretively through acquisitions, which we have not credited. We could not reconcile the size of the 2025 increase in accrued liabilities ($10.1 million of cash flow) to a single cause and therefore removed it from earnings rather than treating it as recurring. The company has not been through a full rate or credit cycle as a public company.