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Four Corners (FCPT) on a High With 101 Property Buyouts in 2020

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Four Corners Property Trust (FCPT - Free Report) has been on an acquisition spree and the company completed real estate acquisitions of a whopping 101 properties in 2020, making a total investment of $222.7 million, excluding transaction costs.

Most recently, the company shelled out $2.9 million for the acquisition of a Chili’s restaurant property through a sale-leaseback transaction. Being located in a potential retail corridor in South Carolina, the property is likely to keep witnessing solid demand. Particularly, the restaurant property is occupied under a new triple net lease by a franchisee operator with a residual lease term of 20 years. Priced at a 6.5% going-in cash capitalization rate, exclusive of transaction costs, the transaction seems strategic for Four Corners.

Also, Four Corners announced the acquisition of a Jiffy Lube property for $1.6 million through a sale-leaseback transaction. This Indiana property is positioned in a highly-trafficked corridor and is occupied under a new triple net lease by a franchisee operator —Hoosier Automotive Services — with a remaining lease term of 15 years.

Primarily engaged in the ownership of high-quality net-leased restaurant properties, Four Corners maintains an investment-grade financial position and seeks potential acquisition opportunities to enhance its portfolio with real estate catering to restaurant and retail industries. The latest acquisitions also come as part of its efforts to bank on buyout opportunities in a year of unprecedented events, thanks to the coronavirus pandemic.

Notably, the health crisis has hit the restaurant as well as the retail industry hard, and rent collections have been dreary. However, the reopening of the economy has been reinstating hopes and things are now looking brighter compared with March 2020, thanks to the recovery in sales.

The quick service category has been minimally affected by COVID-19 in the restaurant industry. Also, the casual dining category has made a healthy rebound with operational efficiency and to-go-ordering.

Four Corners currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 22.4% over the past six months, outperforming its industry’s rally of 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Stocks to Consider

The Zacks Consensus Estimate for CubeSmart’s (CUBE - Free Report) 2020 FFO per share has moved up marginally to $1.67 over the past week. The company currently carries a Zacks Rank of 2.

Extra Space Storage Inc.’s (EXR - Free Report) FFO per share estimates for 2020 have been revised marginally upward to $5.11 in the past week. The company carries a Zacks Rank of 2, currently.

The Zacks Consensus Estimate for City Office REIT, Inc.’s (CIO - Free Report) 2020 FFO per share has remained unchanged at $1.20 in a month’s time. The company holds a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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