Four Corners Continues Acquisition Spree With $1.8M Purchase
Four Corners Property Trust FCPT recently shelled out $1.8 million for the acquisition of a Texas Roadhouse property. The move comes as part of its portfolio-expansion efforts.
The property in Maine is occupied under a triple-net lease with the corporate operator and the lease has roughly nine years of remaining term. Moreover, the buyout seems strategic, with the transaction being priced at a 6.4% going-in cash capitalization rate.
The company also recently purchased a Texas Roadhouse property in Colorado for $4.3 million.
Primarily engaged in the ownership of high-quality net-leased restaurant properties, Four Corners maintains an investment grade financial position (Fitch BBB-) and seeks potential acquisition opportunities. The company acquired 23 properties for a total of $36.2 million in first-quarter 2020.
Apart from the above-mentioned acquisitions, the company recently announced a couple of other buyouts as well. Among these, is a four-property portfolio purchase for $7.6 million, as part of the previously-announced outparcel transaction with Pennsylvania Real Estate Investment Trust, commonly known as “PREIT” (PEI).
Located in Maryland and SC, the properties comprise an IHOP and a multi-tenant BJ’s Restaurants BJRI, Sleep Number SNBR and Verizon VZ. These properties are occupied under net leases with a weighted average remaining term of seven years. Priced at a 6.5% going-in cash cap rate, on a portfolio basis, the transaction marked the fifth and final closing of the PREIT portfolio transaction in November 2019.
This June, Four Corners closed the second tranche of the acquisitions announced last October from Seritage Growth Properties. The three properties were purchased for $11.3 million and are located in Florida. Being positioned in a strong retail corridor, the properties are likely to keep witnessing solid demand.
While the restaurant industry has been affected by the coronavirus pandemic, the reopening of economy is boosting hopes and things are now looking much better compared with late March, thanks to the recovery in sales. Moreover, as of Jun 18, 2020, the company has been able to collect April, May and June rent payments, totaling 91%, 87% and 87%, respectively, of its portfolio’s contractual base rent for those months. Also, acquisitions are expected to drive Four Corners’ growth over the long term.
Shares of this Zacks Rank #2 (Buy) company have depreciated 14.2%, so far this year, compared with the industry's decline of 8.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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