Have you ever driven by one of those highway signs advertising the Powerball lottery and just for a moment fantasized about what you could buy if you won $25 million?
Most people will never have a real opportunity to do that, except of course for those few moments on the highway when one may dream a little as they pass the sign.
But many real estate investment trusts (REITs) with huge lines of credit can buy up lots of properties for millions of dollars. One in particular has been on a huge spending spree that scooped up several different types of properties over the past few weeks totaling close to $25 million. But those were just the latest acquisitions. In 2022, this REIT also closed 103 acquisitions worth approximately $286 million, buying up a dizzying number of restaurants, auto service centers, medical retail buildings and other types of properties.
What is this REIT with the big shopping list? Take a look.
Four Corners Property Trust Inc. (NYSE: FCPT) is a Mill Valley, California-based diversified retail REIT that specializes in owning restaurants and other retail properties. Four Corners’ total portfolio is now 1,023 long-term leased properties in 47 states that house 131 brands.
It began in November 2015, when Four Corners began accumulating restaurants from Darden Restaurants Inc. (NYSE: DRI), which spun out 418 of its restaurants, mostly Olive Garden and LongHorn Steakhouse locations. Although its portfolio was 100% Darden then, about 54% of its rental revenue still comes from its Darden restaurant leases.
Four Corners continued to grow and acquire other properties over the next seven years and branch out from owning only restaurants to also buying other types of retail. About 15% of its portfolio is now non-restaurant retail. These other retailers include auto parts stores, auto service centers, gas stations with convenience stores, medical retail locations such as urgent care, dental clinics, dialysis centers and veterinary care.
In October 2022, Four Corners and a group of banks amended its credit facility by extending $150 million of loans maturing in 2023 and 2024 into a new $90 million term loan maturing in 2027 and another $90 million maturing in 2028.
As of Dec. 31, Four Corners still had $344 million available liquidity. Time to go shopping! Take a look at some of its recent investments:
April 26: Announces the acquisition of Arby’s restaurant for $1.2 million
April 21: Announces the acquisition of VillageMD property for $2.6 million
April 20: Announces the acquisition of HCA emergency room property for $4.6 million
April 19: Announces the acquisition of WellNow Urgent Care property for $2.4 million
April 11: Announces the acquisition of Cooper’s Hawk restaurant for $7.8 million
April 10: Announces the acquisition of Orthopedic Network property for $4.3 million
April 06: Announces the acquisition of VCA Animal Hospital property for $1.2 million
Four Corners’ acquisitions in March are quite similar, with acquisitions of urgent care centers, a Chili’s Grill & Bar, an Aspen dental clinic and a NAPA Auto Parts store.
One could argue that so many acquisitions could be risky, as the economy faces a likely recession. But Four Corners has strict acquisition criteria in place to help minimize risks. And its occupancy rate as of Dec. 31, was an enviable 99.9%.
Four Corners has grown its funds from operations by about 14% over the past five years. With the recent aggressive number of acquisitions, it’s possible that growth will increase more quickly.
Four Corners’ first quarter 2023 operating results will be announced after the market closes on May 1.
Over the past five years, private market real estate investments have outperformed the publicly traded REIT market by about 50%. Check out Benzinga’s Real Estate Offering Screener to discover the latest passive real estate investments.
Check Out More on Real Estate from Benzinga
Don’t miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.
This article This REIT Just Bought $25 Million Of Quality Properties originally appeared on Benzinga.com
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.