Four Corners (FCPT) Acquires Portfolio for $5.2M, Boosts Growth
Four Corners Property Trust FCPT has announced the purchase of three newly built properties for $5.2 million, continuing its spree of strategic acquisitions. This three-property developer portfolio purchase not only diversifies and strengthens FCPT's portfolio but also provides a steady income stream for the company, benefiting both the business and its stockholders.
Located in a strong retail corridor in Michigan, the portfolio has been acquired at a 6.9% cap rate on rent as of the closing date, excluding transaction costs. The properties, which are all corporate-operated under long-term net leases, add a reliable stream of income to the company’s already impressive portfolio.
In addition, earlier this month, Four Corners announced the acquisition of four Tire Discounters properties for $9.1 million via a sale-leaseback transaction. The properties, which are located in Virginia, Georgia and Ohio, are corporate-operated under long-term, triple net leases.
Moreover, in August, Four Corners closed the buyout of a Jiffy Lube property situated in a strong retail corridor in Iowa for $1.6 million. This 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 month, FCPT also announced the purchase of 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, Four Corners 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.
Four Corners’ portfolio, already robust and diversified, is further enhanced by these acquisitions. In addition to strengthening its presence in the retail sector, the company is also making strides in the healthcare domain.
These strategic moves not only broaden FCPT's footprint in various sectors but also ensure portfolio diversification. This benefits both the company and its investors as they gain exposure to growing industries and establish long-term lease agreements with strong tenants.
However, Four Corners’ expansion might face potential headwinds in a high-interest-rate environment, which could increase borrowing costs for future acquisitions. However, FCPT's investment strategy focused on properties with strong credit operators and long-term leases could help cushion these challenges.
Shares of this Zacks Rank #4 (Sell) company have declined 2.1% in the past three months against the industry's increase of 3%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower WELL, SBA Communications SBAC and Americold Realty Trust COLD, each 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 Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.53.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past week to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 2.5% upward over the past month to $1.24.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SBA Communications Corporation (SBAC) : Free Stock Analysis Report
Four Corners Property Trust, Inc. (FCPT) : Free Stock Analysis Report
Americold Realty Trust Inc. (COLD) : Free Stock Analysis Report
Welltower Inc. (WELL) : Free Stock Analysis Report
