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Four Corners (FCPT) to Buy Outparcel Properties for $17.1M
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Four Corners Property Trust (FCPT - Free Report) is on an acquisition spree. The company recently announced that it has signed a definitive agreement for the purchase of seven outparcel properties for $17.1 million. The move comes as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
Located within a highly trafficked and populated corridor in El Paso, TX, the retail outparcels are likely to keep witnessing solid demand. The properties have contractual rent stream growth, net-lease structures and strong tenancy with credit-worthy operators. Hence, the acquisition move seems a strategic fit.
The portfolio comprises six single-tenant restaurant properties and one non-restaurant retail property, and each property has a separate, individual lease. The leases have a current weighted average residual term of roughly five years. The transaction was priced at a cap rate in range with prior FCPT transactions. Four Corners expects the acquisition to close in the third quarter of 2022. This is, however, subject to customary closing norms and regulatory nods.
According to Bill Lenehan, CEO of FCPT, “We are excited to continue opportunistically acquiring outparcel real estate leased to strong credit operators. Our team has developed an expertise in this category and will continue to grow our pipeline with low-rent outparcel properties in dense retail centers.”
Primarily engaged in the ownership and acquisition of high-quality, net-leased restaurants and retail properties, Four Corners seeks potential acquisition opportunities to enhance its portfolio with real estate catering to the restaurant and retail industries. In addition to the $17.1-million outparcel portfolio deal, Four Corners announced the acquisition of a Thrive Pet Healthcare property for $12.5 million in a strong retail corridor in Illinois. It is corporate-operated under a net lease with 15 years of residual term.
Earlier, the company announced the acquisition of a Red Robin property for $2.4 million from Pennsylvania Real Estate Investment Trust (PEI), commonly known as “PREIT.” The move came as part of its PREIT transaction previously announced in June 2022 for portfolio expansion. In June, Four Corners announced that it signed a definitive agreement for the purchase of 11 outparcel properties from PREIT for $32.5 million. The retail outparcels are located within highly trafficked and populated corridors in Maryland, Massachusetts, Pennsylvania and South Carolina.
Some key picks from the REIT sector include Prologis (PLD - Free Report) and Extra Space Storage Inc. (EXR - Free Report) .
Prologis carries a Zacks Rank of 2 (Buy) at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in the past month.
The Zacks Consensus Estimate for Extra Space Storage’s 2022 FFO per share has moved marginally upward in the past month to $8.26. Extra Space Storage’s long-term growth rate is projected at 7.7%. EXR presently sports a Zacks Rank of 1.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Four Corners (FCPT) to Buy Outparcel Properties for $17.1M
Four Corners Property Trust (FCPT - Free Report) is on an acquisition spree. The company recently announced that it has signed a definitive agreement for the purchase of seven outparcel properties for $17.1 million. The move comes as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
Located within a highly trafficked and populated corridor in El Paso, TX, the retail outparcels are likely to keep witnessing solid demand. The properties have contractual rent stream growth, net-lease structures and strong tenancy with credit-worthy operators. Hence, the acquisition move seems a strategic fit.
The portfolio comprises six single-tenant restaurant properties and one non-restaurant retail property, and each property has a separate, individual lease. The leases have a current weighted average residual term of roughly five years. The transaction was priced at a cap rate in range with prior FCPT transactions. Four Corners expects the acquisition to close in the third quarter of 2022. This is, however, subject to customary closing norms and regulatory nods.
According to Bill Lenehan, CEO of FCPT, “We are excited to continue opportunistically acquiring outparcel real estate leased to strong credit operators. Our team has developed an expertise in this category and will continue to grow our pipeline with low-rent outparcel properties in dense retail centers.”
Primarily engaged in the ownership and acquisition of high-quality, net-leased restaurants and retail properties, Four Corners seeks potential acquisition opportunities to enhance its portfolio with real estate catering to the restaurant and retail industries. In addition to the $17.1-million outparcel portfolio deal, Four Corners announced the acquisition of a Thrive Pet Healthcare property for $12.5 million in a strong retail corridor in Illinois. It is corporate-operated under a net lease with 15 years of residual term.
Earlier, the company announced the acquisition of a Red Robin property for $2.4 million from Pennsylvania Real Estate Investment Trust (PEI), commonly known as “PREIT.” The move came as part of its PREIT transaction previously announced in June 2022 for portfolio expansion. In June, Four Corners announced that it signed a definitive agreement for the purchase of 11 outparcel properties from PREIT for $32.5 million. The retail outparcels are located within highly trafficked and populated corridors in Maryland, Massachusetts, Pennsylvania and South Carolina.
Four Corners currently carries a Zacks Rank #3 (Hold). Shares of FCPT have declined 3.6% over the past three months compared with the industry’s decline of 15.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Stocks to Consider
Some key picks from the REIT sector include Prologis (PLD - Free Report) and Extra Space Storage Inc. (EXR - Free Report) .
Prologis carries a Zacks Rank of 2 (Buy) at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in the past month.
The Zacks Consensus Estimate for Extra Space Storage’s 2022 FFO per share has moved marginally upward in the past month to $8.26. Extra Space Storage’s long-term growth rate is projected at 7.7%. EXR presently sports a Zacks Rank of 1.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.