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Four Corners (FCPT) on Acquisition Spree, Buys New York Asset
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Four Corners Property Trust (FCPT - Free Report) shelled out $2.1 million to acquire a WellNow Urgent Care property in a strong retail corridor in New York. The move came as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
The transaction of this newly constructed property was priced at a cap rate in the range of previous FCPT transactions. The buyout seems a strategic fit for FCPT.
This real estate investment trust (REIT), mainly engaged in owning and acquiring high-quality restaurants and retail properties, has been on an acquisition spree. Recently, FCPT acquired a NAPA Auto Parts property positioned in a strong retail corridor in Indiana for $935,000. The transaction of this property, which is occupied under a net lease with roughly four years of the residual term, was priced at a 6.9% cap rate, exclusive of transaction costs.
Moreover, in February 2023, Four Corners shelled out $2.2 million for the acquisition of a Heartland Dental property located in a strong retail corridor in South Carolina. The property is corporate-operated under a long-term net lease with roughly seven years of the residual term. Exclusive of transaction costs, the transaction was priced at a 7.0% cap rate on rent as of the closing date.
In the same month, FCPT acquired two Caliber Collision properties for $3.8 million, which are located in highly trafficked corridors in Illinois. The properties are corporate-operated under long-term net leases with seven years of the residual term. The transaction was priced at a cap rate of 6.7% on rent as of the closing date, excluding the transaction costs.
Moreover, as part of its capital-recycling efforts, FCPT announced the disposition of a Burger King property in Alabama for $2.4 million in February 2023 and the selloff of a Red Lobster property in North Dakota for $4.7 million in January 2023. The company plans to redeploy the proceeds into new investment prospects in sync with its thresholds.
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.
Some better-ranked stocks from the REIT sector are Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Terreno Realty Corporation (TRNO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Alexandria Real Estate Equities’ 2023 FFO per share has moved a cent north to $ 8.95 over the past week.
The Zacks Consensus Estimate for Terreno Realty Corporation’s ongoing year’s FFO per share has been raised a cent over the past month to $ 2.17 .
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) on Acquisition Spree, Buys New York Asset
Four Corners Property Trust (FCPT - Free Report) shelled out $2.1 million to acquire a WellNow Urgent Care property in a strong retail corridor in New York. The move came as part of its portfolio-expansion efforts, with real estate leased to strong credit operators.
The transaction of this newly constructed property was priced at a cap rate in the range of previous FCPT transactions. The buyout seems a strategic fit for FCPT.
This real estate investment trust (REIT), mainly engaged in owning and acquiring high-quality restaurants and retail properties, has been on an acquisition spree. Recently, FCPT acquired a NAPA Auto Parts property positioned in a strong retail corridor in Indiana for $935,000. The transaction of this property, which is occupied under a net lease with roughly four years of the residual term, was priced at a 6.9% cap rate, exclusive of transaction costs.
Moreover, in February 2023, Four Corners shelled out $2.2 million for the acquisition of a Heartland Dental property located in a strong retail corridor in South Carolina. The property is corporate-operated under a long-term net lease with roughly seven years of the residual term. Exclusive of transaction costs, the transaction was priced at a 7.0% cap rate on rent as of the closing date.
In the same month, FCPT acquired two Caliber Collision properties for $3.8 million, which are located in highly trafficked corridors in Illinois. The properties are corporate-operated under long-term net leases with seven years of the residual term. The transaction was priced at a cap rate of 6.7% on rent as of the closing date, excluding the transaction costs.
Moreover, as part of its capital-recycling efforts, FCPT announced the disposition of a Burger King property in Alabama for $2.4 million in February 2023 and the selloff of a Red Lobster property in North Dakota for $4.7 million in January 2023. The company plans to redeploy the proceeds into new investment prospects in sync with its thresholds.
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.
Four Corners currently carries a Zacks Rank #3 (Hold). Shares of FCPT have increased 2.0% so far in the quarter against the industry’s decline of 2.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Terreno Realty Corporation (TRNO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Alexandria Real Estate Equities’ 2023 FFO per share has moved a cent north to $ 8.95 over the past week.
The Zacks Consensus Estimate for Terreno Realty Corporation’s ongoing year’s FFO per share has been raised a cent over the past month to $ 2.17 .
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.