Four Corners (FCPT) Continues Acquisitions, Buys $24.3M Asset
Four Corners Property Trust FCPT recently shelled out $24.3 million for the purchase of five Oak Street Health properties. The buyout aligns with FCPT’s portfolio-expansion efforts, with real estate leased to strong credit operators.
Located in strong retail corridors in Illinois and Indiana, the properties are corporate-operated under net leases. The transaction was priced at a cap rate in range with prior FCPT transactions. The portfolio is likely to generate steady revenues, making this latest buyout a strategic fit.
The company has been on an acquisition spree and recently announced the buyout of a newly constructed Fast Pace Health property located in a strong retail corridor in Louisiana for $2.1 million. The property is occupied under a long-term net lease.
Moreover, Four Corners purchased a Fresenius Medical Care property for $2.6 million. The Georgia-based property is corporate-operated under a triple net lease with about three years of term remaining.
Bolstering its portfolio, FCPT has acquired three W.W. Williams properties for $10.3 million through a sale-leaseback deal. The properties, situated in Michigan and Ohio, are in strong industrial corridors and are corporate-operated under long-term, triple net leases with around 15 years of residual term.
These acquisitions exemplify the company's strategic growth plan, underlining its commitment to the ownership, acquisition and leasing of prime restaurants and retail properties to creditworthy operators. The long-term triple net lease assures the generation of steady revenues over the long term.
In recent times, Four Corners has also made an agreement to acquire up to 14 Darden restaurant properties, including 13 Cheddar’s Scratch Kitchen properties and one Olive Garden property. The deal carries a purchase price of up to $85 million on an initial cash rent amounting to $5.35 million. It is slated for closure in the third quarter of 2023.
FCPT currently carries a Zacks Rank #3 (Hold). Its shares have declined 0.3% year to date, narrower than the industry's decline of 1.3%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are EastGroup Properties EGP and Innovative Industrial Properties IIPR, 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 EastGroup Properties’ current-year funds from operations (FFO) per share has moved marginally north over the past month to $7.56.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
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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