Four Corners Property Trust (FCPT – Free Report) recently expanded its portfolio with the acquisition of a Burger King property in Virginia for $1.7 million. Located in a strong retail corridor, this property is secured under a corporate long-term, triple net lease with roughly 13 years of term remaining, offering a capitalization rate of 7.0% on rent as of the closing date, exclusive of transaction costs.
This acquisition marks the culmination of a robust year for FCPT, bringing its total real estate acquisitions in 2024 to 87 properties, representing an investment of approximately $265 million. $199 million of these acquisitions occurred since late August, highlighting a significant acceleration in investment activities during the latter part of the year.
The company’s consistent acquisition strategy and focus on high-quality properties have contributed to its solid financial performance. Prior to the Burger King property acquisition, FCPT announced the acquisition of a portfolio of automotive service properties from a national operator for $12 million through sale-leaseback. The properties are located in the highly trafficked corridors of multiple states. Also, FCPT bought $24.8 million worth of Christian Brothers Automotive properties in the highly trafficked corridors of Georgia (two), Indiana (two), Florida (one) and Illinois (one).
FCPT’s CEO, Bill Lenehan, expressed enthusiasm about maintaining the current momentum into 2025, aiming to further expand the company’s investment platform and portfolio.
FCPT: In a Nutshell
All these acquisitions reflect FCPT’s strategy of building a diversified portfolio designed to deliver a consistent revenue stream. However, the company’s growth efforts could encounter challenges in the still elevated interest rate environment, leading to the continuation of high borrowing costs.
Over the past six months, shares of this Zacks Rank #4 (Sell) company have risen 12.3% compared with the industry’s growth of 3.4%. However, analysts seem bearish on this stock, with the Zacks Consensus Estimate for its 2024 funds from operations (FFO) per share being lowered marginally over the past two months to $1.72.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Crown Castle (CCI – Free Report) and SL Green Realty (SLG – 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 Crown Castle’s current-year FFO per share has moved a cent north in the past two months to $7.00.
The Zacks Consensus Estimate for SL Green’s 2024 FFO per share has been revised 2.9% north over the past month to $7.83.
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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