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FCPT Expands Portfolio With Automotive Service Property Acquisition

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Carrying over the prior year's property acquisition momentum, Four Corners Property Trust (FCPT - Free Report) announced the purchase of an automotive service property for $4.8 million leased to a national operator. This reflects the company’s diversification efforts to do away with portfolio concentration and industry-specific risks.

The property is located in the highly trafficked corridor in Texas and is corporate-operated under long-term, triple-net leases. The transaction was priced at a cap rate in line with prior FCPT transactions.

FCPT’s Past Acquisitions

Of late, this real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been on an acquisition spree.

Last December, FCPT expanded its portfolio with the acquisition of a Burger King property in Virginia for $1.7 million. This acquisition marked the culmination of a robust year for FCPT, bringing its total real estate acquisitions in 2024 to 87 properties, representing an investment of approximately $265 million.

The above purchases are emblematic of FCPT’s vision of structuring a bouquet portfolio that will ensure a regular stream of revenues. However, the company’s expansions may face potential headwinds in a still high-interest-rate environment, which could keep its borrowing costs elevated.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have risen 0.8% against the industry's drop of 2.7%. However, analysts seem bearish on this stock, with the Zacks Consensus Estimate for its 2024 funds from operations (FFO) per share being lowered by 1.7% over the past week to $1.69.

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Stocks to Consider

Some better-ranked stocks to consider from the broader REIT sector are Welltower (WELL - Free Report) and Terreno Realty (TRNO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s 2024 FFO per share has been raised marginally over the past month to $4.30.

The Zacks Consensus Estimate for Terreno Realty’s 2024 FFO per share has moved northward marginally over the past month to $2.42.

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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