Four Corners Property Trust FCPT has announced the purchase of a Fast Pace Urgent Care property for $2.3 million and two Wawa properties for $2.5 million, continuing its spree of strategic acquisitions. These purchases not only diversify and strengthen FCPT's portfolio but also provide a steady income stream for the company, benefiting both the business and its stockholders.
Located in a retail corridor in Louisiana, the Fast Pace Urgent Care property has been acquired at a cap rate comparable with previous FCPT transactions. This property, which is currently occupied under a long-term net lease, adds a reliable stream of income to the company’s already impressive portfolio.
The two Wawa properties, situated in strong retail corridors in New Jersey, are corporate-operated under a long-term, triple net lease. With a weighted average of 1.4 years of term remaining, the properties were acquired at a 6.7% cap rate on rent as of the closing date, excluding transaction costs.
In addition to these, Four Corners recently closed the significant acquisition of 13 Darden restaurant properties, comprising 12 Cheddar's Scratch Kitchen properties and an Olive Garden property. Purchased for $79.5 million, this acquisition boosted FCPT’s total investment to $269.1 million since the beginning of the year through Jul 6 for 71 properties.
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, as shown by the Fast Pace Urgent Care property purchase. Other noteworthy acquisitions include a WellNow property and a T-Mobile property for $4 million, an Optima Dermatology clinic for $9.3 million and two Tire Discounters properties for $5.3 million.
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 #3 (Hold) company have declined 0.5% year to date against the industry's increase of 1.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Ventas VTR and EastGroup Properties EGP, each presently 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 Ventas’ 2023 funds from operations (FFO) per share has risen marginally over the past two months to $2.98.
The Zacks Consensus Estimate for EastGroup Properties’ current-year FFO per share has moved marginally north over the past two months to $7.56.
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.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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