Four Corners (FCPT) Acquires Two Fast Pace Health Properties
Four Corners Property Trust FCPT recently acquired two newly constructed Fast Pace Health properties, located in strong retail corridors in Indiana and Louisiana, for $4.9 million. Fast Pace Health is an urgent care provider with more than 200 healthcare centers across the United States. The buyout aligns with the FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
The properties are occupied under long-term, net leases and were priced at a cap rate in range with the prior FCPT transactions. The portfolio is likely to generate steady revenues over the long term, making FCPT’s latest buyout a strategic fit.
This real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been very active on the acquisition front lately.
Recently, the company shelled out $3.3 million to acquire a Chili property located in a strong retail corridor in Virginia. The property is corporate-operated under a triple net lease with around three years of term remaining. The transaction was priced at a cap rate of 6.7%, excluding transaction costs.
It also announced the buyout of a National Veterinary Associates (“NVA”) property in Alaska for $637,000. The property is corporate-operated under a new triple net lease to NVA with 15 years of term and three, five-year options and annual rent increases of 2%. Based on FCPT’s total basis in the property, the transaction was priced at a 7.3% entry cap rate, excluding transaction costs.
In a similar move, this May, the company acquired a Brookshire Brothers grocery store property located in a strong retail corridor in Texas for $3 million. The property is occupied under a long-term, triple net lease with around four years of term remaining and priced at a cap rate of 6.8%, excluding transaction costs.
Moreover, in April, FCPT announced the acquisitions of a NAPA Auto Parts property located in a strong retail corridor in Nebraska for $1.3 million and an Arby property located in a highly trafficked corridor in Kentucky for $1.2 million.
FCPT’s capital-recycling efforts are a reflection of its prudent-capital management practices. In February 2023, it announced the dispositions of a Burger King property in Alabama for $2.4 million and a Red Lobster property in North Dakota for $4.7 million in January 2023. The company plans to redeploy the proceeds into new investment prospects in sync with its thresholds.
Nonetheless, rising interest rates and macroeconomic uncertainty remain key concerns for the company.
FCPT currently carries a Zacks Rank #4 (Sell).
Its shares have lost 3.8% in the quarter-to-date period compared with the real estate market’s fall of 2.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain IRM, Host Hotels & Resorts HST and Stag Industrial STAG, 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 Iron Mountain’s 2023 funds from operations (FFO) per share is pegged at $3.96.
The Zacks Consensus Estimate for Host Hotels’ current-year FFO per share is pegged at $1.89.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share is pegged at $2.25.
Note: Anything related to earnings presented in this write-up represents 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
Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
Iron Mountain Incorporated (IRM) : Free Stock Analysis Report
Stag Industrial, Inc. (STAG) : Free Stock Analysis Report
Four Corners Property Trust, Inc. (FCPT) : Free Stock Analysis Report
