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Four Corners Unveils Outparcel Portfolio Growth With Seritage

Four Corners Property Trust FCPT recently announced its outparcel portfolio growth with Seritage Growth Properties SRG. The company has signed an amendment to the deal originally announced last October, for acquiring nine additional single tenant outparcel properties from Seritage for $27.3 million. The transaction will take place in tranches, with the majority closing this year and the rest in 2021.

The nine outparcels span four restaurant brands, three bank branches and two retail brands. Among the restaurant brands are Arby’s, BJ’s Restaurant and Brewhouse, Popeyes, and Portillo’s. The non-restaurant tenants comprise three bank branches operated by Bank of America BAC, Chase and Truist Bank of Truist Financial Corporation TFC, as well as a Recreational Equipment, Inc. (“REI”), and an auto services center operated by American Automobile Association (“AAA”).

With the properties in this transaction having contractual rent growth, net-lease structures and strong tenancy with credit-worthy operators, as well as a weighted average remaining term of roughly nine years, the move seems a strategic fit for the company.

Primarily engaged in the ownership of high-quality net-leased restaurant properties, Four Corners maintains an investment-grade financial position and seeks attractive acquisition opportunities. With the latest deal, aggregate portfolios between Four Corners Property Trust and Seritage totaled 32 properties for $96 million, of which 14 properties worth $45 million have closed so far.

While the pandemic has hit the restaurant industry hard, the reopening of economy is boosting hopes and things are now looking much better compared with late March, thanks to the recovery in sales. Moreover, the company is targeting growth of its portfolio through acquisition of additional real estate to lease, on a net basis, for use in the restaurant and retail industries. Particularly, in the latest transaction, four of the brands (AAA, Bank of America, Chase and Truist Bank) are new to the company’s portfolio.

In addition, the company’s rent collection from tenants has been strong. As of Jul 29, the company has been able to collect July, June, May and April rent payments, totaling 99%, 91%, 90% and 95%, respectively, of its portfolio’s contractual base rent for those months.

Shares of this Zacks Rank #2 (Buy) company have appreciated 12.7% over the past three months, while its industry has rallied 6.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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