Four Corners on Expansion Spree, Buys Property Worth $2.2M
Four Corners Property Trust FCPT recently shelled out $2.2 million for the acquisition of a Tires Plus property. The move comes as part of the company’s portfolio-expansion efforts.
The Kansas property is occupied under a net lease with roughly four years of residual term. Being positioned in a highly-trafficked retail corridor, this facility is likely to keep witnessing solid demand. Moreover, the buyout seems a strategic one, with the transaction being priced at a 7.2% going-in cash capitalization rate (excluding transaction costs).
Primarily engaged in the ownership of high-quality net-leased restaurant properties, Four Corners maintains an investment grade financial position (Fitch BBB-) and seeks attractive acquisition opportunities. As of Jun 30, 2020, the company had about $250 million of available liquidity. This comprised $5.1 million of cash and cash equivalents, and $245.5 million of capacity under its credit facility.
Apart from the above-mentioned acquisition, recently the company carried out a couple of other buyouts as well. It shelled out $5.5 million for a ground-leased Olive Garden property and adjacent land. The property is occupied under a triple-net ground lease, with 10 years of residual term. The transaction was priced at a cap rate in range with the prior Four Corners transactions.
Also, the company has acquired a Caliber Collision property for $1.8 million. The Wisconsin property is located in a major retail corridor and is likely to keep witnessing strong demand in the days to come. The facility is occupied under a net lease with 10 years of residual term. The transaction was priced at a 6.7% going-in cash capitalization rate (excluding transaction costs).
Furthermore, the company has made an acquisition of a BP p.l.c. BP gas station property for $3.3 million. The ground lease is guaranteed by BP corporate and it has a sub-lease to a Dunkin’ Donuts DNKN franchisee. It also made a two-property portfolio purchase for $7.6 million, as part of the outparcel transaction with Pennsylvania Real Estate Investment Trust, commonly known as “PREIT” PEI.
While the pandemic has hit the restaurant industry hard, the reopening of economy is boosting hopes and things are now looking much better compared with late March, thanks to the recovery in sales. In addition, as of Jul 29, 2020, the company has been able to collect July, June, May and April rent payments, totaling 99%, 91%, 90% and 95%, respectively, of its portfolio’s contractual base rent for those months. Furthermore, the company’s acquisitions are expected to drive growth over the long term.
Shares of this Zacks Rank #3 (Hold) company have appreciated 29.1% over the past three months, while its industry has declined 18.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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