FCPT Announces Acquisition of 19 Bloomin’ Brands Restaurant Properties for $66.4 Million

Rhea-AI Summary

Four Corners Property Trust (NYSE:FCPT) has acquired 19 Bloomin' Brands restaurant properties for $66.4 million. The acquisition includes 10 Outback Steakhouse and 10 Carrabba's Italian Grill restaurants across 10 states. The properties are under two long-term master leases to corporate Bloomin' Brands entities. This transaction makes Bloomin' Brands FCPT's third-largest tenant, representing about 3.3% of the company's cash rent. The deal also reduces Darden Restaurants' share of FCPT's cash rent to below 50%, furthering FCPT's diversification efforts while maintaining portfolio strength.

Positive

• Acquisition of 19 properties for $66.4 million, expanding FCPT's portfolio
• Bloomin' Brands becomes FCPT's third-largest tenant, representing 3.3% of cash rent
• Transaction reduces dependency on Darden Restaurants, improving tenant diversification
• Properties located in strong retail corridors with high traffic and attractive demographics
• Long-term master leases with corporate Bloomin' Brands entities

Negative

• None.

Insights

Financial Analyst

This acquisition marks a significant move for FCPT, expanding its portfolio with 19 high-quality restaurant properties for $66.4 million. The deal enhances FCPT's tenant diversification, with Bloomin' Brands becoming their third-largest tenant, representing 3.3% of cash rent. Notably, this transaction reduces Darden Restaurants' share to below 50% of FCPT's cash rent, mitigating concentration risk. The cap rate aligns with previous FCPT transactions, suggesting a fair valuation. The long-term master leases with corporate Bloomin' Brands entities provide stable, predictable cash flows. This strategic move strengthens FCPT's position in the net-lease restaurant property market, potentially improving its risk-adjusted returns and attractiveness to investors.

Real Estate Investment Expert

FCPT's acquisition of these 19 Bloomin' Brands properties is a strategic coup in the competitive net-lease REIT sector. The properties' locations in strong retail corridors with high traffic and attractive demographics enhance the portfolio's overall quality. The diversification across 10 states mitigates geographic risk. The inclusion of two popular brands, Outback Steakhouse and Carrabba's Italian Grill, adds depth to FCPT's tenant mix. This move not only expands FCPT's footprint but also strengthens its negotiating position with tenants. The long-term master leases provide a stable income stream, important for REITs. This transaction demonstrates FCPT's ability to execute large-scale acquisitions while maintaining disciplined underwriting, potentially leading to improved shareholder value and dividend stability.

Market Research Analyst

This acquisition reflects FCPT's astute market positioning in the face of evolving consumer dining trends. By adding Outback Steakhouse and Carrabba's Italian Grill to its portfolio, FCPT is capitalizing on the enduring popularity of casual dining concepts. These brands have shown resilience and adaptability, particularly in their off-premise strategies during recent market disruptions. The geographic spread across 10 states aligns with demographic shifts and urbanization trends. FCPT's focus on "high-quality, net-leased restaurant and retail properties" demonstrates a keen understanding of market dynamics. This move could position FCPT favorably as the restaurant industry continues to recover and evolve, potentially leading to increased market share and improved portfolio performance in the competitive REIT landscape.

MILL VALLEY, Calif.--(BUSINESS WIRE)-- Four Corners Property Trust (NYSE:FCPT), a real estate investment trust primarily engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties (“FCPT” or the “Company”), is pleased to announce the acquisition of 19 Bloomin’ Brands restaurant properties comprising of 20 total restaurants (10 Outback Steakhouse restaurants and 10 Carrabba’s Italian Grill restaurants, including one dual-tenant property with both concepts) for a purchase price of $66.4 million. The 19 properties are located across 10 states (AZ, FL, GA, KY, LA, NC, NV, PA, SC, and TN). The sites are in strong retail corridors with high traffic and attractive demographics. The properties are under two long-term master leases of ten restaurants each and leased to corporate Bloomin’ Brands entities. The transaction was priced at cap rate in range with previous FCPT transactions.

As of the closing date, Bloomin’ Brands is now FCPT’s third largest tenant, comprising approximately 3.3% of the Company’s cash rent. In addition, Outback Steakhouse and Carrabba’s Italian Grill restaurants are FCPT’s sixth and thirteenth largest brands by cash rent, respectively. Lastly, as a result of this transaction, Darden Restaurants will now comprise less than 50% of the Company’s cash rent. FCPT has published a Capital Raising and Acquisitions Update presentation with further details on this transaction and the Company’s brand diversification, available on FCPT’s website.

Bill Lenehan stated: “We are very pleased with the large addition of Bloomin’ Brands restaurants to our portfolio. FCPT continues to find opportunities that accretively grow our portfolio while adhering to our high-quality underwriting. We’re particularly glad to see another large public company operator rise to our #3 tenant behind Darden and Brinker as this transaction furthers our diversification efforts while maintaining the strength of our portfolio.”

About FCPT

FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the ownership, acquisition and leasing of restaurant and retail 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. Additional information about FCPT can be found on the website at www.fcpt.com.

Category: Acquisition

View source version on businesswire.com: https://www.businesswire.com/news/home/20240826086097/en/

Four Corners Property Trust:

Bill Lenehan, 415-965-8031

CEO

Patrick Wernig, 415-965-8038

CFO

Source: Four Corners Property Trust

FAQ

How many properties did FCPT acquire from Bloomin' Brands?

FCPT acquired 19 Bloomin' Brands restaurant properties, comprising 20 total restaurants (10 Outback Steakhouse and 10 Carrabba's Italian Grill, including one dual-tenant property).

What was the purchase price for the Bloomin' Brands properties acquired by FCPT?

FCPT acquired the Bloomin' Brands properties for a purchase price of $66.4 million.

In which states are the newly acquired FCPT properties located?

The 19 properties are located across 10 states: Arizona, Florida, Georgia, Kentucky, Louisiana, North Carolina, Nevada, Pennsylvania, South Carolina, and Tennessee.

How does this acquisition affect FCPT's tenant diversification?

This acquisition makes Bloomin' Brands FCPT's third-largest tenant, comprising approximately 3.3% of the company's cash rent. It also reduces Darden Restaurants' share to less than 50% of FCPT's cash rent, improving tenant diversification.