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Four Corners (FCPT) on Acquisition Spree, Buys Seritage Property

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Four Corners Property Trust FCPT recently shelled out $1.5 million for the acquisition of a Chick-fil-A 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 this year.

Being located in a highly-trafficked corridor in Missouri, the property is likely to keep witnessing solid demand. Particularly, the restaurant property has a residual lease term of roughly eight years. The transaction is priced at a cap rate in range with its previous transactions.

Remarkably, 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 potential acquisition opportunities to enhance its portfolio with real estate catering to restaurant and retail industries. With the latest buyout, aggregate portfolios between Four Corners Property Trust and Seritage totaled 32 properties for $96 million, of which 21 properties worth $63 million have closed so far.

The company has been, in fact, on an acquisition spree and recently announced the acquisition of a portfolio of 13 KFC properties for $21.7 million. Situated in Alabama, the properties have roughly 14 years of residual lease term and annual rent increases of 2%.

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. The health crisis has particularly affected the quick service category in the restaurant industry. Also, the casual dining category has made a healthy rebound with operational efficiency and to-go-ordering.

Four Corners currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 14.1% over the past three months, outperforming its industry’s rally of 4.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Stocks to Consider

CubeSmart’s CUBE Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved up 1.2% to $1.66 over the past month. The company currently carries a Zacks Rank of 2.

Rexford Industrial Realty, Inc. REXR FFO per share estimate for the current year has been revised upward by 1.6% to $1.30 over the past two months. The company carries a Zacks Rank of 2, currently.

City Office REIT, Inc.’s CIO Zacks Consensus Estimate for the ongoing-year FFO per share has moved 5.3% north to $1.20 in two months’ time. The company holds a Zacks Rank of 2 at present.

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Four Corners Property Trust, Inc. (FCPT) : Free Stock Analysis Report
 
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