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Four Corners (FCPT) Sells Property, Focuses on Growth Scopes
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Four Corners Property Trust (FCPT - Free Report) recently disposed of a Red Lobster property in Minnesota for $5.9 million. The move is in sync with the company’s capital-recycling efforts, which are focused on capitalizing on high-quality, net-leased properties. Shares of FCPT witnessed a marginal loss on Sep 1 normal trading session on the NYSE.
The disposition of the property, which was corporate-operated under a triple net lease, was priced at a cap rate in range with prior FCPT dispositions. The company intends to redeploy the proceeds into new investment opportunities in alignment with its thresholds through an Internal Revenue Code Section 1031 like-kind exchange.
Earlier, in June 2023, it disposed of a Burger King property in Virginia for $2.4 million. The sale was carried out at a cap rate on current rent of 6.6%, excluding transaction costs. FCPT planned to redeploy the proceeds into new investment prospects in sync with its thresholds.
Apart from its capital redeployment efforts, this real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been bolstering its external growth via strategic acquisitions.
In August 2023, it closed the buyout of three newly built properties in a strong retail corridor in Michigan for $5.2 million. The portfolio was acquired at a 6.9% cap rate on rent as of the closing date, excluding transaction costs. The properties, which are all corporate-operated under long-term net leases, add a reliable stream of income to the company’s already impressive portfolio.
Further, in the same month, it concluded the purchase of four Tire Discounters properties that are corporate-operated under long-term, triple net leases for $9.1 million through a sale-leaseback transaction.
Notably, during the second quarter, the company completed 48 property acquisitions for an aggregate purchase price of $169.7 million. The initial weighted average cash yield for rents in place as of Jun 30, 2023, was 6.85%. The properties have a weighted average remaining lease term of 12.7 years. The buyouts seem a strategic fit for FCPT and are likely to garner steady revenues over the long term.
Analysts seem bullish regarding the company’s 2023 earnings prospects. The Zacks Consensus Estimate for its ongoing year’s funds from operations (FFO) per share has been revised 1.8% upward over the month.
Nonetheless, macroeconomic uncertainty and a high interest rate environment pose concerns for the company.
FCPT carries a Zacks Rank #4 (Sell) at present.
Shares of the company have lost 1.1% in the quarter-to-date period compared with the real estate market’s fall of 0.4%.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.53.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past week to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 1.6% over the past week to $1.26.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Four Corners (FCPT) Sells Property, Focuses on Growth Scopes
Four Corners Property Trust (FCPT - Free Report) recently disposed of a Red Lobster property in Minnesota for $5.9 million. The move is in sync with the company’s capital-recycling efforts, which are focused on capitalizing on high-quality, net-leased properties. Shares of FCPT witnessed a marginal loss on Sep 1 normal trading session on the NYSE.
The disposition of the property, which was corporate-operated under a triple net lease, was priced at a cap rate in range with prior FCPT dispositions. The company intends to redeploy the proceeds into new investment opportunities in alignment with its thresholds through an Internal Revenue Code Section 1031 like-kind exchange.
Earlier, in June 2023, it disposed of a Burger King property in Virginia for $2.4 million. The sale was carried out at a cap rate on current rent of 6.6%, excluding transaction costs. FCPT planned to redeploy the proceeds into new investment prospects in sync with its thresholds.
Apart from its capital redeployment efforts, this real estate investment trust (REIT), mainly engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties, has been bolstering its external growth via strategic acquisitions.
In August 2023, it closed the buyout of three newly built properties in a strong retail corridor in Michigan for $5.2 million. The portfolio was acquired at a 6.9% cap rate on rent as of the closing date, excluding transaction costs. The properties, which are all corporate-operated under long-term net leases, add a reliable stream of income to the company’s already impressive portfolio.
Further, in the same month, it concluded the purchase of four Tire Discounters properties that are corporate-operated under long-term, triple net leases for $9.1 million through a sale-leaseback transaction.
Notably, during the second quarter, the company completed 48 property acquisitions for an aggregate purchase price of $169.7 million. The initial weighted average cash yield for rents in place as of Jun 30, 2023, was 6.85%. The properties have a weighted average remaining lease term of 12.7 years. The buyouts seem a strategic fit for FCPT and are likely to garner steady revenues over the long term.
Analysts seem bullish regarding the company’s 2023 earnings prospects. The Zacks Consensus Estimate for its ongoing year’s funds from operations (FFO) per share has been revised 1.8% upward over the month.
Nonetheless, macroeconomic uncertainty and a high interest rate environment pose concerns for the company.
FCPT carries a Zacks Rank #4 (Sell) at present.
Shares of the company have lost 1.1% in the quarter-to-date period compared with the real estate market’s fall of 0.4%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , SBA Communications (SBAC - Free Report) and Americold Realty Trust (COLD - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.53.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past week to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 1.6% over the past week to $1.26.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.