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Four Corners (FCPT) Sells Delaware Asset to Bolster Growth
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Four Corners Property Trust (FCPT - Free Report) recently concluded the sale of a Red Lobster property, corporate-operated under a triple net lease, in Delaware for $5.3 million. The announcement follows the company’s disposition of a Red Lobster property in Minnesota for $5.9 million earlier this month. Shares of FCPT witnessed a gain of 1.15% on Sep 28 normal trading session on the NYSE.
The transaction was priced at a cap rate in range with prior FCPT dispositions.
The company’s latest disposition moves are in sync with its capital-recycling efforts, which are focused on capitalizing on high-quality, net-leased properties to boost long-term growth. It intends to redeploy the sale proceeds into new investment opportunities in alignment with its thresholds through an Internal Revenue Code Section 1031 like-kind exchange.
In a similar move, in June 2023, FCPT sold 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.
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, FCPT 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 income stream to the company’s already impressive portfolio.
Further, in the same month, it purchased 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, FCPT 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 like a strategic fit for the company and are likely to garner steady revenues over the long term.
Analysts seem bullish regarding FCPT’s ongoing year’s funds from operations (FFO) per share prospects, with the Zacks Consensus Estimate revised 1.2% upward over the past two months.
Nonetheless, macroeconomic uncertainty and a high interest rate environment pose concerns.
Shares of this Zacks Rank #3 (Hold) company have lost 13.3% in the quarter-to-date period compared with the real estate market’s fall of 8.5%.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.55.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.90.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 2.4% over the past month 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 Delaware Asset to Bolster Growth
Four Corners Property Trust (FCPT - Free Report) recently concluded the sale of a Red Lobster property, corporate-operated under a triple net lease, in Delaware for $5.3 million. The announcement follows the company’s disposition of a Red Lobster property in Minnesota for $5.9 million earlier this month. Shares of FCPT witnessed a gain of 1.15% on Sep 28 normal trading session on the NYSE.
The transaction was priced at a cap rate in range with prior FCPT dispositions.
The company’s latest disposition moves are in sync with its capital-recycling efforts, which are focused on capitalizing on high-quality, net-leased properties to boost long-term growth. It intends to redeploy the sale proceeds into new investment opportunities in alignment with its thresholds through an Internal Revenue Code Section 1031 like-kind exchange.
In a similar move, in June 2023, FCPT sold 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.
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, FCPT 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 income stream to the company’s already impressive portfolio.
Further, in the same month, it purchased 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, FCPT 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 like a strategic fit for the company and are likely to garner steady revenues over the long term.
Analysts seem bullish regarding FCPT’s ongoing year’s funds from operations (FFO) per share prospects, with the Zacks Consensus Estimate revised 1.2% upward over the past two months.
Nonetheless, macroeconomic uncertainty and a high interest rate environment pose concerns.
Shares of this Zacks Rank #3 (Hold) company have lost 13.3% in the quarter-to-date period compared with the real estate market’s fall of 8.5%.
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 $3.55.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.90.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 2.4% over the past month 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.