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Four Corners (FCPT) Boosts Portfolio With $7.8M Property Buyout
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Four Corners Property Trust (FCPT - Free Report) recently shelled out $7.8 million to acquire a Cooper’s Hawk restaurant property located in a strong retail corridor in Illinois. The transaction amount was inclusive of tenant improvement allowances. The move is in line with the FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is corporate-operated under a new long-term triple net lease and is priced at a cap rate in range with prior FCPT transactions. The portfolio is likely to generate steady revenues over the long term, making FCPT’s latest buyout a strategic fit.
Of late, this real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been on an acquisition spree.
Recently, the company announced the acquisition of a Midwest Orthopedic Network property in a strong medical corridor in Wisconsin for $4.3 million. The property is corporate-operated under a net lease with roughly four years of residual term and annual rent hikes of 2.5%. The transaction was priced at an 8.1% cap rate, excluding transaction costs.
In a similar move, this April, the company completed the purchase of a VCA Animal Hospital property in Virginia for $1.2 million. The property is corporate-operated under a net lease with roughly three years of residual term, and the transaction was priced at a cap rate of 7.6%, excluding transaction costs.
Moreover, in March 2023, FCPT acquired a WellNow Urgent Care center in a strong retail corridor in Indiana for $2.5 million. The transaction of the newly constructed, corporate-operated property was priced at a cap rate in the range of previous FCPT transactions.
In the same month, the company closed the buyout of a WellNow Urgent Care property in a strong retail corridor in New York for $2.1 million. It also concluded the acquisition of an Aspen Dental property located in a strong retail corridor in New Mexico for $1.9 million and a NAPA Auto Parts property in a strong retail corridor in Indiana for $935,000.
Further, 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, increasing interest rates and macroeconomic uncertainty are raising concerns.
FCPT currently carries a Zacks Rank #3 (Hold). Its shares have gained 10.7% in the past six months compared with the real estate market’s growth of 6%.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $2.12.
The Zacks Consensus Estimate for Terreno Realty’s 2023 FFO per share is pegged at $2.17.
The Zacks Consensus Estimate for Innovative Industrial Properties’ ongoing year’s FFO per share is pegged at $8.36.
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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Four Corners (FCPT) Boosts Portfolio With $7.8M Property Buyout
Four Corners Property Trust (FCPT - Free Report) recently shelled out $7.8 million to acquire a Cooper’s Hawk restaurant property located in a strong retail corridor in Illinois. The transaction amount was inclusive of tenant improvement allowances. The move is in line with the FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is corporate-operated under a new long-term triple net lease and is priced at a cap rate in range with prior FCPT transactions. The portfolio is likely to generate steady revenues over the long term, making FCPT’s latest buyout a strategic fit.
Of late, this real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been on an acquisition spree.
Recently, the company announced the acquisition of a Midwest Orthopedic Network property in a strong medical corridor in Wisconsin for $4.3 million. The property is corporate-operated under a net lease with roughly four years of residual term and annual rent hikes of 2.5%. The transaction was priced at an 8.1% cap rate, excluding transaction costs.
In a similar move, this April, the company completed the purchase of a VCA Animal Hospital property in Virginia for $1.2 million. The property is corporate-operated under a net lease with roughly three years of residual term, and the transaction was priced at a cap rate of 7.6%, excluding transaction costs.
Moreover, in March 2023, FCPT acquired a WellNow Urgent Care center in a strong retail corridor in Indiana for $2.5 million. The transaction of the newly constructed, corporate-operated property was priced at a cap rate in the range of previous FCPT transactions.
In the same month, the company closed the buyout of a WellNow Urgent Care property in a strong retail corridor in New York for $2.1 million. It also concluded the acquisition of an Aspen Dental property located in a strong retail corridor in New Mexico for $1.9 million and a NAPA Auto Parts property in a strong retail corridor in Indiana for $935,000.
Further, 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, increasing interest rates and macroeconomic uncertainty are raising concerns.
FCPT currently carries a Zacks Rank #3 (Hold). Its shares have gained 10.7% in the past six months compared with the real estate market’s growth of 6%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) , Terreno Realty (TRNO - Free Report) and Innovative Industrial Properties (IIPR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $2.12.
The Zacks Consensus Estimate for Terreno Realty’s 2023 FFO per share is pegged at $2.17.
The Zacks Consensus Estimate for Innovative Industrial Properties’ ongoing year’s FFO per share is pegged at $8.36.
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.