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Four Corners (FCPT) Sells Pennsylvania Asset, Banks on Growth

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Four Corners Property Trust (FCPT - Free Report) recently announced the disposition of a Red Lobster property in Pennsylvania for $5.1 million. This comes after the last month’s announcement of a disposition of a Red Lobster property in Ohio for $4.9 million.

As part of its strategic efforts, Four Corners 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, FCPT seeks potential acquisition opportunities to enhance its portfolio.

The company has been on an acquisition spree and recently purchased a portfolio of three properties in a strong retail corridor in Illinois for $11.5 million. The properties are leased to Aspen Dental, Addus Homecare, AT&T, WellNow and Banfield Pet Hospital. The tenants are corporate-operated under net leases with a weighted average of five years of term remaining.

Apart from the latest acquisition, Four Corners recently shelled out $6.9 million for the acquisition of a Red Lobster property and a Smokey Bones property positioned in a highly trafficked corridor in New York. The properties are corporate-operated under triple net leases with a weighted average of 2.5 years of residual term.

Also, Four Corners announced the acquisition of a four-property Buffalo Wild Wings portfolio for $14.3 million. 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.

Moreover, 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 not witnessed any revision in estimates for 2022 and 2023 funds from operations (FFO) per share over the past week, and estimates stand at $1.64 and $1.68, respectively.

Four Corners currently carries a Zacks Rank #4 (Sell). Shares of FCPT have rallied 17.5% in the past three months, outperforming the industry’s increase of 10%.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and STAG Industrial, Inc. (STAG - 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.

The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 3.2% north to $1.92 over the past two months.
 
The Zacks Consensus Estimate for STAG Industrial’s 2022 FFO per share has been raised marginally over the past week to $2.21.
 
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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