FCPT Diversifies Portfolio with $12M Automotive Service Properties Acquisition

Four Corners Property Trust (FCPT) has announced a strategic acquisition of a portfolio of automotive service properties for $12 million via sale-leaseback. This move aligns with FCPT's strategy of acquiring high-quality, net-leased properties in strong retail locations, providing stable and predictable cash flows. The transaction was priced at a cap rate consistent with previous FCPT deals, suggesting an annual NOI contribution of approximately $780,000 to $900,000.

FCPT's acquisition of automotive service properties diversifies its portfolio beyond its core restaurant and retail focus. This strategic expansion into the automotive service sector helps mitigate geographic risk by spreading investments across various regions. The multi-state portfolio diversification reduces the impact of local economic downturns or market fluctuations, as the performance of one state's properties may not significantly affect the overall portfolio.

The acquisition of a $12 million portfolio of automotive service properties via sale-leaseback represents a relatively modest addition to FCPT's market cap. However, it aligns with their strategy of acquiring high-quality net-leased properties in strong retail locations. The undisclosed cap rate, stated to be consistent with previous FCPT deals, likely falls within their typical range of 6.5% to 7.5%. This suggests an annual NOI contribution of approximately $780,000 to $900,000, adding another stable income stream to FCPT's investment portfolio.

FCPT's tenant has requested confidentiality around disclosure of the brand name, but the transaction was priced at a cap rate in range with previous FCPT transactions. The properties are secured under long-term, triple net leases, shifting property expenses to tenants and providing FCPT with stable, predictable cash flows.

In conclusion, FCPT's acquisition of a portfolio of automotive service properties for $12 million via sale-leaseback is a strategic move that aligns with their investment strategy. This diversification into the automotive service sector helps mitigate geographic risk and adds another stable income stream to FCPT's portfolio. As FCPT continues to grow its portfolio, investors should monitor the company's progress and potential future acquisitions.