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Four Corners (FCPT) to Acquire 14 Darden Restaurant Properties

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Four Corners Property Trust (FCPT - Free Report) is set to expand its portfolio with the acquisition of up to 14 Darden restaurant properties. The deal, which includes 13 Cheddar’s Scratch Kitchen properties and one Olive Garden property, carries a purchase price of up to $85 million on an initial cash rent amounting to $5.35 million. It is slated for closure in the third quarter of 2023.

The properties are strategically located in strong retail corridors across Tennessee, Indiana, Kentucky and Ohio, promising high traffic count and favorable demographics. The move seems a strategic fit with each property being subject to an individual triple net lease, backed by a Darden corporate guaranty and featuring 1.5% annual rent increases, offering a weighted average lease term of 13 years.

This acquisition exemplifies FCPT's strategic growth plan, underlining its commitment to the ownership, acquisition, and leasing of prime restaurant and retail properties to creditworthy operators. The long-term triple net lease assures the generation of steady revenues over the long term.

FCPT, a REIT focused primarily on acquiring and owning high-quality, net-leased restaurants and retail properties, has been active in its acquisition strategy. The company has broadened its portfolio with the acquisition of a McAlister’s Deli property, valued at $2.8 million. The property, situated in a bustling retail area in South Carolina, operates under a triple-net lease with about 10 years of the term left.

The company completed the purchase of a Heartland Dental property in Missouri for $2.6 million. The property operates under a long-term, triple-net lease with approximately five years remaining on the term.

Moreover, in May, FCPT expanded its portfolio with the addition of two new Fast Pace Health properties in Indiana and Louisiana, purchased for $4.9 million. Fast Pace Health, a national urgent care provider with more than 200 centers, occupies the properties under long-term net leases. Nonetheless, high interest rates and macroeconomic uncertainty remain key concerns for the company.

FCPT currently carries a Zacks Rank #4 (Sell).

Its shares have gained 3.8% in the past month against the real estate market’s fall of 0.4%.

Stocks to Consider

Some better-ranked stocks from the REIT sector are Rexford Industrial Realty, Inc. (REXR - Free Report) and Americold Realty Trust, Inc. (COLD - 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 Rexford Industrial Realty’s current-year funds from operations (FFO) per share has been revised marginally north over the past month to $2.19. This indicates an 11.7% increase year over year.

The Zacks Consensus Estimate for Americold Realty Trust’s 2023 FFO per share is pegged at $1.19, which suggests a 7.2% increase year over year.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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