Four Corners Property Trust (NYSE:FCPT) announced that it has signed a definitive agreement for the purchase of 14 outparcel properties (16 leases) from PREIT (NYSE: PEI) for $29.9 million. The transaction is priced at a 6.5% going-in cash cap rate, exclusive of transaction costs. The portfolio includes 10 single tenant restaurant properties, three non-restaurant retail properties, and one restaurant-anchored, multi-tenant property. The properties are expected to close on a rolling basis from the fourth quarter of 2019 through the first half of 2020, subject to customary closing conditions, seller’s board approval, and regulatory approvals.
Bill Lenehan, CEO of Four Corners Property Trust, stated: “We are excited to grow our relationship with the PREIT team and announce this 14-property outparcel portfolio in addition to the three outparcel acquisitions we have closed already with them. Joe and his team at PREIT have been an exceptional partner for us, and we’re pleased to support their development and value creation efforts as they upgrade their portfolio and fortify their balance sheet.”
The 14 outparcels span 10 restaurant brands: BJ’s Restaurant, Burger King, Chick-Fil-A, Chipotle, Chuck E. Cheese (2), IHOP, Olive Garden, Outback Steakhouse, Starbucks, and Texas Roadhouse. The portfolio also includes five non-restaurant brands: Firestone, Mavis, and REI, with Sleep Number and Verizon as part of the BJ’s Restaurant-anchored, multi-tenant property. All of the non-restaurant outparcels share similar qualities with FCPT’s restaurant assets and are in close proximity to FCPT owned restaurants. The properties in this transaction have building or leased-space sizes comparable to FCPT’s existing portfolio, contractual rent stream growth, net-lease structures, and strong tenancy with credit-worthy operators.
The retail outparcels are located within highly trafficked and populated corridors in Maryland, Michigan, North Carolina, Pennsylvania, and South Carolina. Of the 16 leases, 15 are with the brand’s corporate entities. Each property has a separate, individual lease and the leases have a current weighted average remaining term of approximately eight years. Additionally, six of the 14 properties are either recently constructed or remodeled within the past year as part of PREIT’s redevelopment strategy.
FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and retail industries.