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Four Corners (FCPT) Boosts Portfolio With Property Buyouts

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Four Corners Property Trust (FCPT - Free Report) is on an acquisition spree. Recently, the company shelled out $5.4 million for purchasing three Caliber Collision properties and $6.4 million for acquiring two WellNow Urgent Care properties from ComptonAddy. The moves came as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.

The buyouts seem a strategic fit for FCPT and are likely to generate steady revenues over the long term. The Caliber Collision properties are located in highly trafficked corridors in Indiana and corporate-operated under net leases with a weighted average of around five years of residual term.

Moreover, the WellNow Urgent Care properties are newly built and are positioned in strong retail corridors in Ohio. The properties are corporate-operated under net leases with a residual term of 10 years.

The transaction of the Caliber Collision properties was priced at a 7% cap rate. Meanwhile, the same for the WellNow Urgent Care properties was priced at a 6.2% cap rate on rent as of the closing date, both excluding transaction costs.

Apart from the recent acquisitions, Four Corners shelled out $2.6 million to acquire a Chili’s property from the Seritage transaction announced in October 2019 and expanded in August 2020. The property is positioned in a strong retail corridor in Florida and is under a triple-net lease. Also, FCPT acquired a Firestone property, located in a highly trafficked corridor in Missouri, for $1.7 million.

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. In the third quarter of 2022, FCPT acquired 26 properties for a combined purchase price of $69.9 million at an initial weighted average cash yield of 6.3%.

However, Four Corners currently carries a Zacks Rank #4 (Sell). Shares of FCPT have rallied 10.3% so far in the quarter, outperforming the industry’s increase of 4.4%.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and Lamar Advertising Company (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

While the Zacks Consensus Estimate for VICI Properties’ current-year FFO per share has remained unchanged in the past month at $1.91, the same for 2023 has moved marginally north to $2.07.

The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past month to $7.34.

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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