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Four Corners (FCPT) Expands Portfolio With Diverse Properties
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Four Corners Property Trust (FCPT - Free Report) has recently acquired an Olive Garden property for $3.4 million and a National Veterinary Alliance property for $7.8 million. The Olive Garden property, located in a strong retail corridor in Indiana, and the National Veterinary Alliance property, situated in a highly trafficked corridor in Pennsylvania, are both corporate-operated under long-term, triple net leases. These acquisitions underscore FCPT's strategic growth plan and its commitment to acquiring high-quality properties with creditworthy operators.
FCPT's current acquisition spree further illustrates the company's dedication to portfolio expansion. In addition to the Olive Garden and National Veterinary Alliance properties, the company has recently invested $3.7 million in a Texas Roadhouse property, $1.4 million in a Bojangles’ property, $6.6 million in three Mo’Bettahs properties, $24.3 million in five Oak Street Health properties, and $10.3 million in three W.W. Williams properties. These acquisitions strengthen FCPT's presence in strong retail and industrial corridors across multiple states.
FCPT's strategy goes beyond mere expansion, focusing on the quality of the properties and their tenants. The company eyes properties with strong credit operators and long-term, triple net leases, a feature that ensures steady revenues over an extended period.
Furthermore, FCPT's recent agreement to acquire up to 14 Darden restaurant properties, including 13 Cheddar’s Scratch Kitchen properties and one Olive Garden property, is a testament to FCPT's robust growth strategy. 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.
Despite the impressive growth, a high-interest-rate environment poses potential challenges for FCPT. High interest rates could raise the cost of borrowing for future acquisitions, potentially slowing down the company's expansion efforts. However, FCPT's strategy of investing in properties with strong credit operators and long-term leases might provide some buffer against these headwinds.
The implications of these acquisitions for FCPT's business are multifold. First, they expand FCPT's geographic footprint, diversifying the company's portfolio and reducing the risk associated with dependence on a single market. Second, the focus on properties with long-term, triple net leases ensures a reliable income stream, enhancing the company's financial stability. Finally, the acquisition of properties from creditworthy operators mitigates the risk of vacancies, further securing FCPT's revenue generation.
Shares of this Zacks Rank #3 (Hold) company have declined 1% year to date, narrower than the industry's fall of 2.5%.
The Zacks Consensus Estimate for EastGroup Properties’ current-year funds from operations (FFO) per share has moved 0.9% north over the past two months to $7.56.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
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.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Four Corners (FCPT) Expands Portfolio With Diverse Properties
Four Corners Property Trust (FCPT - Free Report) has recently acquired an Olive Garden property for $3.4 million and a National Veterinary Alliance property for $7.8 million. The Olive Garden property, located in a strong retail corridor in Indiana, and the National Veterinary Alliance property, situated in a highly trafficked corridor in Pennsylvania, are both corporate-operated under long-term, triple net leases. These acquisitions underscore FCPT's strategic growth plan and its commitment to acquiring high-quality properties with creditworthy operators.
FCPT's current acquisition spree further illustrates the company's dedication to portfolio expansion. In addition to the Olive Garden and National Veterinary Alliance properties, the company has recently invested $3.7 million in a Texas Roadhouse property, $1.4 million in a Bojangles’ property, $6.6 million in three Mo’Bettahs properties, $24.3 million in five Oak Street Health properties, and $10.3 million in three W.W. Williams properties. These acquisitions strengthen FCPT's presence in strong retail and industrial corridors across multiple states.
FCPT's strategy goes beyond mere expansion, focusing on the quality of the properties and their tenants. The company eyes properties with strong credit operators and long-term, triple net leases, a feature that ensures steady revenues over an extended period.
Furthermore, FCPT's recent agreement to acquire up to 14 Darden restaurant properties, including 13 Cheddar’s Scratch Kitchen properties and one Olive Garden property, is a testament to FCPT's robust growth strategy. 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.
Despite the impressive growth, a high-interest-rate environment poses potential challenges for FCPT. High interest rates could raise the cost of borrowing for future acquisitions, potentially slowing down the company's expansion efforts. However, FCPT's strategy of investing in properties with strong credit operators and long-term leases might provide some buffer against these headwinds.
The implications of these acquisitions for FCPT's business are multifold. First, they expand FCPT's geographic footprint, diversifying the company's portfolio and reducing the risk associated with dependence on a single market. Second, the focus on properties with long-term, triple net leases ensures a reliable income stream, enhancing the company's financial stability. Finally, the acquisition of properties from creditworthy operators mitigates the risk of vacancies, further securing FCPT's revenue generation.
Shares of this Zacks Rank #3 (Hold) company have declined 1% year to date, narrower than the industry's fall of 2.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are EastGroup Properties (EGP - Free Report) and Innovative Industrial Properties (IIPR - Free Report) , each presently 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 EastGroup Properties’ current-year funds from operations (FFO) per share has moved 0.9% north over the past two months to $7.56.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
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.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.