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Four Corners (FCPT) Revamps Portfolio With $3.8M Asset Sale
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Four Corners Property Trust (FCPT - Free Report) recently disposed of a corporate-operated Red Lobster property in Kentucky that was under a triple net lease for $3.8 million as part of its capital-recycling efforts. The move comes on the heels of its recent announcement regarding the sale of its Delaware Red Lobster property for $5.3 million.
The transaction was priced at a cap rate in range with prior FCPT dispositions.
Earlier this month, the company realized $5.9 million from the sale of a Red Lobster property in Minnesota that was corporate-operated under a triple net lease.
FCPT’s recent dispositions are aimed at enhancing its portfolio with high-quality, net-leased properties and boosting 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.
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, is making concerted efforts to drive external growth via strategic acquisitions.
In August 2023, FCPT purchased 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 of 2023, 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 for the company in the near term.
Shares of this Zacks Rank #3 (Hold) company have lost 14% in the past three months compared with the real estate market’s fall of 10.9%.
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 Americold Realty Trust’s ongoing year’s FFO per share has been raised marginally over the past month to $1.26.
The Zacks Consensus Estimate for EastGroup Properties’ current-year FFO per share has moved 1.1% northward over the past two months to $7.62.
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) Revamps Portfolio With $3.8M Asset Sale
Four Corners Property Trust (FCPT - Free Report) recently disposed of a corporate-operated Red Lobster property in Kentucky that was under a triple net lease for $3.8 million as part of its capital-recycling efforts. The move comes on the heels of its recent announcement regarding the sale of its Delaware Red Lobster property for $5.3 million.
The transaction was priced at a cap rate in range with prior FCPT dispositions.
Earlier this month, the company realized $5.9 million from the sale of a Red Lobster property in Minnesota that was corporate-operated under a triple net lease.
FCPT’s recent dispositions are aimed at enhancing its portfolio with high-quality, net-leased properties and boosting 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.
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, is making concerted efforts to drive external growth via strategic acquisitions.
In August 2023, FCPT purchased 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 of 2023, 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 for the company in the near term.
Shares of this Zacks Rank #3 (Hold) company have lost 14% in the past three months compared with the real estate market’s fall of 10.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , Americold Realty Trust (COLD - Free Report) and EastGroup Properties (EGP - 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 Americold Realty Trust’s ongoing year’s FFO per share has been raised marginally over the past month to $1.26.
The Zacks Consensus Estimate for EastGroup Properties’ current-year FFO per share has moved 1.1% northward over the past two months to $7.62.
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.