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Four Corners (FCPT) on Acquisition Spree, Buys Virginia Asset
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Shares of Four Corners Property Trust (FCPT - Free Report) were marginally up on May 15 regular trading session on the NYSE after it recently shelled out $3.3 million to acquire a Chili’s property located in a strong retail corridor in Virginia. The move aligns with the FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is corporate-operated under a triple net lease with around three years of term remaining. Priced at a cap rate of 6.7%, excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
It also announced the buyout of a National Veterinary Associates (“NVA”) property in Alaska for $637,000. The property is corporate-operated under a new triple net lease to NVA with 15 years of term and three, five-year options and annual rent increases of 2%. Based on FCPT’s total basis in the property, the transaction was priced at a 7.3% entry cap rate, excluding transaction costs.
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.
This May, the company acquired a Brookshire Brothers grocery store property located in a strong retail corridor in Texas for $3 million. The property is occupied under a long-term, triple net lease with around four years of term remaining and priced at a cap rate of 6.8%, excluding transaction costs.
Moreover, in April, FCPT announced the acquisition of a NAPA Auto Parts property located in a strong retail corridor in Nebraska for $1.3 million. The property, occupied under a net lease, has roughly two years of term remaining and was priced at a cap rate of 7%, excluding transaction costs.
In the same month, FCPT completed the buyout of an Arby property, located in a highly trafficked corridor in Kentucky, for $1.2 million. Furthermore, the company purchased a VillageMD property in a highly trafficked corridor in Illinois for $2.6 million. It also concluded the buyout of a HCA Emergency Room for $4.6 million and a newly constructed WellNow Urgent Care property for $2.4 million, located in strong retail corridors of Texas and Indiana, respectively.
Also, 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 #4 (Sell).
Its shares have lost 3.1% in the past six months compared with the real estate market’s fall of 4.5%.
Image: Bigstock
Four Corners (FCPT) on Acquisition Spree, Buys Virginia Asset
Shares of Four Corners Property Trust (FCPT - Free Report) were marginally up on May 15 regular trading session on the NYSE after it recently shelled out $3.3 million to acquire a Chili’s property located in a strong retail corridor in Virginia. The move aligns with the FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is corporate-operated under a triple net lease with around three years of term remaining. Priced at a cap rate of 6.7%, excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
It also announced the buyout of a National Veterinary Associates (“NVA”) property in Alaska for $637,000. The property is corporate-operated under a new triple net lease to NVA with 15 years of term and three, five-year options and annual rent increases of 2%. Based on FCPT’s total basis in the property, the transaction was priced at a 7.3% entry cap rate, excluding transaction costs.
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.
This May, the company acquired a Brookshire Brothers grocery store property located in a strong retail corridor in Texas for $3 million. The property is occupied under a long-term, triple net lease with around four years of term remaining and priced at a cap rate of 6.8%, excluding transaction costs.
Moreover, in April, FCPT announced the acquisition of a NAPA Auto Parts property located in a strong retail corridor in Nebraska for $1.3 million. The property, occupied under a net lease, has roughly two years of term remaining and was priced at a cap rate of 7%, excluding transaction costs.
In the same month, FCPT completed the buyout of an Arby property, located in a highly trafficked corridor in Kentucky, for $1.2 million. Furthermore, the company purchased a VillageMD property in a highly trafficked corridor in Illinois for $2.6 million. It also concluded the buyout of a HCA Emergency Room for $4.6 million and a newly constructed WellNow Urgent Care property for $2.4 million, located in strong retail corridors of Texas and Indiana, respectively.
Also, 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 #4 (Sell).
Its shares have lost 3.1% in the past six months compared with the real estate market’s fall of 4.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain (IRM - Free Report) , Host Hotels & Resorts (HST - Free Report) and Stag Industrial (STAG - 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 Iron Mountain’s 2023 FFO per share is pegged at $3.96.
The Zacks Consensus Estimate for Host Hotels’ current-year FFO per share is pegged at $1.89.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share is pegged at $2.25.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.