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Four Corners (FCPT) Grows Portfolio With W.W. Williams Assets

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Four Corners Property Trust (FCPT - Free Report) is continuing its acquisition drive with the buyout of three W.W. Williams properties for $10.3 million through a sale-leaseback deal. The acquisition of the properties, which are located in the strong industrial corridors in Michigan and Ohio, is part of FCPT’s portfolio expansion efforts, focusing on real estate leased to strong credit operators.

The properties are subject to long-term, triple net leases, with roughly 15 years of residual term, along with four five-year options, and annual rent hikes of 2%. Priced at a cap rate of 7.1%, excluding transaction costs, the buyout seems a strategic fit for FCPT. The portfolio is likely to generate steady revenues over the long term.

Of late, this real estate investment trust (REIT) has been on an acquisition binge. Recently, the company announced the acquisition of two properties. It acquired a dual-tenant property housing Outback Steakhouse and Hook & Reel from Seritage Growth Properties for $5.2 million. Additionally, it purchased a National Veterinary Associates property for $1.4 million.

FCPT has also made an agreement to acquire up to 14 Darden restaurant properties, including 13 Cheddar’s Scratch Kitchen properties and one Olive Garden property. The deal 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.

These acquisitions exemplify the company'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.

The company has also 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.

FCPT currently carries a Zacks Rank #3 (Hold). Its shares have lost 5% in the past three months compared with the industry's decline of 7%.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are Rexford Industrial Realty (REXR - Free Report) and Equity Commonwealth (EQC - 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 1.4% north over the past two months to $2.19.

The Zacks Consensus Estimate for Equity Commonwealth’s 2023 FFO per share has been revised 18.9% north over the past two months to 88 cents.

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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Rexford Industrial Realty, Inc. (REXR) - free report >>

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Four Corners Property Trust, Inc. (FCPT) - free report >>

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