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Four Corners (FCPT) Continues Acquisition, Buys Illinois Assets
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Four Corners Property Trust (FCPT - Free Report) is on an acquisition spree and recently shelled out $14.3 million for the acquisition of the four-property Buffalo Wild Wings portfolio. The move came as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
Positioned in strong retail corridors in Illinois, the properties are under individual long-term, triple net leases, each with roughly nine years of residual term. Priced at a 7.3% cap rate on rent as of the closing date and excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
Apart from this acquisition, Four Corners recently acquired a WellNow Urgent Care property for $2.4 million, five Jiffy Lube properties for $7.9 million and a Gerber Collision & Glass property for $2.8 million.
Located in a strong retail corridor in Michigan, the WellNow Urgent Care property is operated under a net lease with 10 years of residual term. The Jiffy Lube properties are positioned in highly trafficked corridors in Indiana, occupied under long-term triple net leases with a residual term of 15 years and 10% rent hikes every five years.
Moreover, positioned in a strong retail corridor in Texas, the Gerber Collision & Glass property is operated under a net lease with roughly four years of the remaining term.
As part of its capital recycling efforts, recently, FCPT also announced the disposition of a Red Lobster property in Ohio for $4.9 million. The company plans to redeploy the proceeds into new investment prospects in sync with its thresholds.
Primarily engaged in the ownership and acquisition of high-quality 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%. The buyouts seem a strategic fit for Four Corners and are likely to generate steady revenues over the long term.
However, rate hikes, inflation and macroeconomic uncertainty are raising concerns. FCPT has witnessed marginal downward revisions in estimates for both 2022 and 2023 funds from operations per share over the past month to $1.63 and $1.68, respectively.
Four Corners currently carries a Zacks Rank #4 (Sell). Shares of FCPT have rallied 10.6% so far in the quarter, outperforming the industry’s increase of 2.3%.
The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 3.2% north to $1.92 over the past month.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past two months 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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Four Corners (FCPT) Continues Acquisition, Buys Illinois Assets
Four Corners Property Trust (FCPT - Free Report) is on an acquisition spree and recently shelled out $14.3 million for the acquisition of the four-property Buffalo Wild Wings portfolio. The move came as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
Positioned in strong retail corridors in Illinois, the properties are under individual long-term, triple net leases, each with roughly nine years of residual term. Priced at a 7.3% cap rate on rent as of the closing date and excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
Apart from this acquisition, Four Corners recently acquired a WellNow Urgent Care property for $2.4 million, five Jiffy Lube properties for $7.9 million and a Gerber Collision & Glass property for $2.8 million.
Located in a strong retail corridor in Michigan, the WellNow Urgent Care property is operated under a net lease with 10 years of residual term. The Jiffy Lube properties are positioned in highly trafficked corridors in Indiana, occupied under long-term triple net leases with a residual term of 15 years and 10% rent hikes every five years.
Moreover, positioned in a strong retail corridor in Texas, the Gerber Collision & Glass property is operated under a net lease with roughly four years of the remaining term.
As part of its capital recycling efforts, recently, FCPT also announced the disposition of a Red Lobster property in Ohio for $4.9 million. The company plans to redeploy the proceeds into new investment prospects in sync with its thresholds.
Primarily engaged in the ownership and acquisition of high-quality 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%. The buyouts seem a strategic fit for Four Corners and are likely to generate steady revenues over the long term.
However, rate hikes, inflation and macroeconomic uncertainty are raising concerns. FCPT has witnessed marginal downward revisions in estimates for both 2022 and 2023 funds from operations per share over the past month to $1.63 and $1.68, respectively.
Four Corners currently carries a Zacks Rank #4 (Sell). Shares of FCPT have rallied 10.6% so far in the quarter, outperforming the industry’s increase of 2.3%.
Image Source: Zacks Investment Research
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 #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 3.2% north to $1.92 over the past month.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past two months 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.