Four Corners Property Trust (NYSE: FCPT) has announced its capital raising and acquisitions update for August 2024. The company has fully paid down its revolver balance and funded $71 million in incremental Q3 acquisitions with equity. FCPT has raised approximately $148 million in equity via its ATM platform quarter-to-date, of which about $41 million remains available for forward settlement. The leverage stands at an estimated 5.3x, including outstanding equity forward settlement, well below the stated leverage limit. The company has acquired $132 million of properties at a 7.2% cap rate in 2024 year-to-date, and the portfolio now consists of 1,176 leases to 154 brands with annual base rent of $228.7 million. Notably, Darden now represents less than 50% of the base rent, with Olive Garden falling from 74% at inception to 35% today.
FCPT has issued approximately $156 million of equity via the ATM in 2024 year-to-date and about $880 million since inception, which equates to roughly 90% of the total equity issued since inception. The company's approach with the ATM has kept issuance costs significantly lower than traditional equity offerings, achieving broker fees of just about 1.5% and investor discounts of approximately 1%, compared to 7-10% for traditional follow-ons.
In terms of brand diversification, the portfolio now consists of 35% Olive Garden (vs. 74% at inception), 21% non-restaurant exposure, and about 49% Darden (vs. 100% at inception). The spin-off Darden portfolio remains a strong base tenant for FCPT, while the diversification to other restaurant brands, medical retail, and auto service now represents over half the portfolio.
The company has consistently delivered growth and diversification through new acquisitions, focusing on credit-worthy tenants, high-quality real estate, and efficient execution. One notable case study is FCPT's acquisition of a $66 million Bloomin' portfolio, which became the company's 3rd largest tenant by cash rent, with Outback as the 6th largest brand and Carrabba’s as the 13th. This transaction represents a continuation of the strategy to own high-quality real estate while delivering accretive growth and diversification through acquisitions.
In August 2024, FCPT acquired 20 restaurants under master leases to the corporate entity, with more than 10 years of term remaining, strong rent coverage, and consistent with FCPT’s existing portfolio. The geography of the acquisition spans 10 states, mainly in the southeast and southwest, with attractive demographics and high traffic.
Today the company's shares have moved 0.8% to a price of $27.71. For the full picture, make sure to review Four Corners Property Trust's 8-K report.
