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Four Corners (FCPT) Acquires South Carolina Asset for $2.8M
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Shares of Four Corners Property Trust (FCPT - Free Report) were nearly 1% up in the after-hours trading session on the NYSE on May 19 after it announced the buyout of a McAlister’s Deli property for $2.8 million. The acquisition of the property, located in a strong retail corridor in South Carolina, is part of FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is occupied under a long-term, triple net lease with around 10 years of term remaining. Priced at a cap rate on rent of 6.5% as of the closing date, excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
This real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been very active on the acquisition front lately.
It recently closed the acquisition of a Heartland Dental property, located in a strong retail corridor in Missouri, for $2.6 million. The property is occupied under a long-term, triple-net lease with a residual term of roughly five years.
The purchase, inclusive of the rent credits received at closing, was priced at a cap rate of 7%. The same, excluding the transaction costs, was priced at a 6.8% cap rate on rent as of the closing date.
In a similar move, this May, FCPT acquired two newly constructed Fast Pace Health properties, located in strong retail corridors in Indiana and Louisiana, for $4.9 million. Fast Pace Health is an urgent care provider with more than 200 healthcare centers across the United States. The properties are occupied under long-term, net leases and were priced at a cap rate in range with the prior FCPT transactions.
In the same month, the company purchased a Chili property located in a strong retail corridor in Virginia for $3.3 million and a National Veterinary Associates (“NVA”) property in Alaska for $637,000.
FCPT also acquired a Brookshire Brothers grocery store property located in a strong retail corridor in Texas for $3 million earlier this month.
Moreover, in April, it concluded the buyouts of a NAPA Auto Parts property located in a strong retail corridor in Nebraska for $1.3 million and an Arby property in a highly trafficked corridor in Kentucky for $1.2 million.
FCPT is focused on its capital-recycling efforts, which reflect its prudent-capital management practices. In February 2023, it announced the disposition of a Burger King property in Alabama for $2.4 million and 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.
Nonetheless, rising interest rates and macroeconomic uncertainty remain key concerns for the company.
FCPT currently carries a Zacks Rank #4 (Sell).
Its shares have lost 4% in the past six months compared with the real estate market’s fall of 8.3%.
Image: Bigstock
Four Corners (FCPT) Acquires South Carolina Asset for $2.8M
Shares of Four Corners Property Trust (FCPT - Free Report) were nearly 1% up in the after-hours trading session on the NYSE on May 19 after it announced the buyout of a McAlister’s Deli property for $2.8 million. The acquisition of the property, located in a strong retail corridor in South Carolina, is part of FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The property is occupied under a long-term, triple net lease with around 10 years of term remaining. Priced at a cap rate on rent of 6.5% as of the closing date, excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.
This real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been very active on the acquisition front lately.
It recently closed the acquisition of a Heartland Dental property, located in a strong retail corridor in Missouri, for $2.6 million. The property is occupied under a long-term, triple-net lease with a residual term of roughly five years.
The purchase, inclusive of the rent credits received at closing, was priced at a cap rate of 7%. The same, excluding the transaction costs, was priced at a 6.8% cap rate on rent as of the closing date.
In a similar move, this May, FCPT acquired two newly constructed Fast Pace Health properties, located in strong retail corridors in Indiana and Louisiana, for $4.9 million. Fast Pace Health is an urgent care provider with more than 200 healthcare centers across the United States. The properties are occupied under long-term, net leases and were priced at a cap rate in range with the prior FCPT transactions.
In the same month, the company purchased a Chili property located in a strong retail corridor in Virginia for $3.3 million and a National Veterinary Associates (“NVA”) property in Alaska for $637,000.
FCPT also acquired a Brookshire Brothers grocery store property located in a strong retail corridor in Texas for $3 million earlier this month.
Moreover, in April, it concluded the buyouts of a NAPA Auto Parts property located in a strong retail corridor in Nebraska for $1.3 million and an Arby property in a highly trafficked corridor in Kentucky for $1.2 million.
FCPT is focused on its capital-recycling efforts, which reflect its prudent-capital management practices. In February 2023, it announced the disposition of a Burger King property in Alabama for $2.4 million and 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.
Nonetheless, rising interest rates and macroeconomic uncertainty remain key concerns for the company.
FCPT currently carries a Zacks Rank #4 (Sell).
Its shares have lost 4% in the past six months compared with the real estate market’s fall of 8.3%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain (IRM - Free Report) , Rexford Industrial Realty (REXR - 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 funds from operations (FFO) per share is pegged at $3.96.
The Zacks Consensus Estimate for Rexford Industrial’s current-year FFO per share is pegged at $2.19.
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.