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Four Corners (FCPT) Buys $1.6M Iowa Property, Bolsters Growth
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Continuing with bolstering its overall portfolio quality, with real estate leased to strong credit operators, Four Corners Property Trust (FCPT - Free Report) recently closed on the buyout of a Jiffy Lube property situated in a strong retail corridor in Iowa for $1.6 million.
FCPT’s newly acquired property was priced at a cap rate on rent of 7% as of the closing date, excluding transaction costs, and is presently occupied under a long-term triple net lease with roughly 12 years of residual term. This is likely to enable the company to generate steady revenues over the long term, making its latest purchase seem prudent.
This real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been paving the way for its external growth via strategic acquisitions.
This month, it purchased a dual-tenant Aspen Dental and WellNow Urgent Care property in a retail corridor in New York for $3.3 million. The property is occupied under a long-term net lease basis and was priced at a cap rate in range with previous FCPT transactions.
In July 2023, FCPT concluded the buyouts of a Covenant Health Emergency Room in Texas for $8.7 million and four newly built properties in strong retail corridors in Michigan and Indiana for $17.9 million.
Moreover, the company’s capital-recycling efforts reflect its prudent-capital management practices, providing scope to capitalize on long-term growth opportunities.
In June 2023, it disposed of a Burger King property in Virginia for $2.4 million. The sale was carried out at a cap rate on current rent of 6.6%, excluding transaction costs. The company redeployed the proceeds into new investment prospects in sync with its thresholds.
Regarding FCPT’s second-quarter 2023 results, it reported adjusted funds from operations per share of 42 cents in the second quarter of 2023, in line with the Zacks Consensus Estimate. The figure was a cent higher than the prior-year quarter’s tally.
Notably, during the second quarter, the company completed 48 property acquisitions for an aggregate purchase price of $169.7 million. The initial weighted average cash yield for rents in place as of Jun 30, 2023, was 6.85%. The properties have a weighted average remaining lease term of 12.7 years.
Shares of this Zacks Rank #3 (Hold) company have gained 2.5% in the quarter-to-date period compared with the real estate market’s growth of 1.2%.
Nonetheless, a high-interest rate environment and macroeconomic uncertainty remain key near-term concerns for the company.
The Zacks Consensus Estimate for Welltower’s current-year funds from operations (FFO) per share has moved marginally northward over the past month to $3.51.
The Zacks Consensus Estimate for Ventas’ ongoing year’s FFO per share has been raised marginally upward over the past month to $3.00.
The Zacks Consensus Estimate for W.P. Carey’s 2023 FFO per share has moved marginally upward in the past two months to $5.36.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Four Corners (FCPT) Buys $1.6M Iowa Property, Bolsters Growth
Continuing with bolstering its overall portfolio quality, with real estate leased to strong credit operators, Four Corners Property Trust (FCPT - Free Report) recently closed on the buyout of a Jiffy Lube property situated in a strong retail corridor in Iowa for $1.6 million.
FCPT’s newly acquired property was priced at a cap rate on rent of 7% as of the closing date, excluding transaction costs, and is presently occupied under a long-term triple net lease with roughly 12 years of residual term. This is likely to enable the company to generate steady revenues over the long term, making its latest purchase seem prudent.
This real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been paving the way for its external growth via strategic acquisitions.
This month, it purchased a dual-tenant Aspen Dental and WellNow Urgent Care property in a retail corridor in New York for $3.3 million. The property is occupied under a long-term net lease basis and was priced at a cap rate in range with previous FCPT transactions.
In July 2023, FCPT concluded the buyouts of a Covenant Health Emergency Room in Texas for $8.7 million and four newly built properties in strong retail corridors in Michigan and Indiana for $17.9 million.
Moreover, the company’s capital-recycling efforts reflect its prudent-capital management practices, providing scope to capitalize on long-term growth opportunities.
In June 2023, it disposed of a Burger King property in Virginia for $2.4 million. The sale was carried out at a cap rate on current rent of 6.6%, excluding transaction costs. The company redeployed the proceeds into new investment prospects in sync with its thresholds.
Regarding FCPT’s second-quarter 2023 results, it reported adjusted funds from operations per share of 42 cents in the second quarter of 2023, in line with the Zacks Consensus Estimate. The figure was a cent higher than the prior-year quarter’s tally.
Notably, during the second quarter, the company completed 48 property acquisitions for an aggregate purchase price of $169.7 million. The initial weighted average cash yield for rents in place as of Jun 30, 2023, was 6.85%. The properties have a weighted average remaining lease term of 12.7 years.
Shares of this Zacks Rank #3 (Hold) company have gained 2.5% in the quarter-to-date period compared with the real estate market’s growth of 1.2%.
Nonetheless, a high-interest rate environment and macroeconomic uncertainty remain key near-term concerns for the company.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , Ventas (VTR - Free Report) and W.P. Carey (WPC - Free Report) . Each of these companies presently carries 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 Welltower’s current-year funds from operations (FFO) per share has moved marginally northward over the past month to $3.51.
The Zacks Consensus Estimate for Ventas’ ongoing year’s FFO per share has been raised marginally upward over the past month to $3.00.
The Zacks Consensus Estimate for W.P. Carey’s 2023 FFO per share has moved marginally upward in the past two months to $5.36.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.