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Four Corners on Acquisition Spree, Buys 2 Seritage Properties

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Four Corners Property Trust FCPT recently shelled out $1.6 million for the acquisition of a Popeyes restaurant property and $2.8 million for a Bahama Breeze restaurant property from Seritage Growth Properties. The moves come as part of its portfolio-expansion efforts through the Seritage transaction, which was announced last October and expanded in August.

Being located in highly-density traffic and populated corridors in South Carolina, both properties are likely to keep witnessing solid demand. Particularly, the Popeyes (franchisee lease) restaurant property has a residual lease term of roughly 14 years. Moreover, the Bahama Breeze restaurant property has a remaining term of 10 years and is leased to the brand’s corporate entity, which is a subsidiary of Darden Restaurants, Inc. DRI. The transactions are priced at a cap rate in range with its previous transactions.

Notably, this August, Four Corners announced its outparcel portfolio growth with Seritage Growth Properties, signing an amendment to the deal originally announced last October, for acquiring nine additional single tenant outparcel properties from Seritage for $27.3 million. The nine outparcels included four restaurant brands, three bank branches and two retail brands. The transactions are slated to occur in tranches, with the majority closing this year and the rest in 2021.

Primarily engaged in the ownership of high-quality net-leased restaurant properties, Four Corners maintains an investment-grade financial position and seeks impressive acquisition opportunities to enhance its portfolio with real estate catering to restaurant and retail industries. With the latest buyouts, aggregate portfolios between Four Corners Property Trust and Seritage totaled 32 properties for $96 million, of which 19 properties worth $59 million have closed so far.

The pandemic has hit the restaurant as well as the retail industry hard and rent collections have been dreary. However, the reopening of economy is reinstating hopes and things are now looking brighter compared with late March, thanks to the recovery in sales.

Four Corners currently carries a Zacks Rank #4 (Sell). Shares of the company have declined 9.9% over the past year, wider than its industry’s fall of 8.9%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Alpine Income Property Trust, Inc.’s PINE funds from operations (FFO) per share estimate for 2020 has been revised 4.4% upward to $1.18 over the past month. It currently carries a Zacks Rank of 2 (Buy).

Duke Realty Corporation’s DRE Zacks Consensus Estimate for the current-year FFO per share moved up 2.8% to $1.49 over the past two months. The company currently holds a Zacks Rank of 2.

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.

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Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report
 
Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
Four Corners Property Trust, Inc. (FCPT) : Free Stock Analysis Report
 
Alpine Income Property Trust, Inc. (PINE) : Free Stock Analysis Report
 
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